tti 


LIBRARY  OF  THE 

UNIVERSITY  OF  ILLINOIS 

AT  URBANA-CHAMPAIGN 

IN  MEMORY  OF 

STEWART  S.  HOWE 

JOURNALISM  CLASS  OF  1928 

STEWART  S.  HOWE  FOUNDATION 


338.7 

R369S 
cop .  6 


I.H.S. 


75  M^ars  of 


Gas  Ser\ice  in  Chicago 

/)v  W'.M.i.Aei:  Kkk 

J{n  interesting  history  oj  the 
origin  and  grozvth  of  the  gas 
industry  in  Chicago^  together 
zvith  an  account  of  the  various 
gas  companies  now  consoli- 
dated into  one  organization 


^DCT^ 


The  Peoples 
Gas  Lioht  and  Coke  Company 

Michigan  .-frfnuf  at  Adams  Sirfft 
CHICAGO,  ILLINOIS 


Copyritht,  19Jf.  Tut  I'LurLLk  Ga*  Lioht  am>  Cuki.  Cuui-any 


3  3^.7  . 


Preface 


SOMETHING  will  have  gone  amiss  in  this  brief  account 
k^  of  seventy -five  years  of  gas  service  in  Chicago  if^  at  least 
between  the  lines ^  it  is  not  apparent  that  there  has  been  from 
the  beginning  a  slow  but  certain  training  in  that  most  diffi- 
cult of  all  arts^  the  art  of  livings  an  education  in  humanity 
if  not  in  the  humanities. 

At  the  outset  the  public  had  to  be  taught  the  use  of  gas  as  a 
means  of  lighting.,  the  best  then  known;  at  the  close  the  public 
is  still  being  taught  the  use  of  gas  ^  but  for  purposes  of  cookings 
heating  and  refrigeration.,  and  still  the  best.  Always  has  there 
been  adjustment  and  readjustment  between  the  public^  the 
Company  and  its  employees.  Since  the  creation  of  a  state 
commission  to  supervise  and  regulate  public  utility  companies ^ 
the  men  of  wisdom  and  of  political  acumen  who  compose  it 
have  been  learning  that  public  utilities  are  well  intentioned^ 
and  are  increasingly  aware  that  mere  selfishness^  however 
seemingly  enlightened.,  means  economic  failure^  while  the 
Company  has  been  taught  in  its  turn  that  politicians  and 
office  holders  can  be  fair  and  disinterested. 

This  educational  process  shows  at  its  best  in  the  final 
chapter.  It  takes  time  to  rid  both  employer  and  employed  of 
the  outgrown  suggestions  implied  in  the  old  legal  phrase 
''master  and  servant^''  but  it  is  being  done.  The  employee^ 
as  time  goes  on,  is  surer  of  the  simple  essentials  to  happiness, 
justice  and  his  job.  The  management  is  equally  assured  of 
the  willingness  of  its  working  force  to  give  an  honest  day's 
work  in  return.  The  reactions  of  this  double  assurance  upon 
the  inhabitants  of  Chicago  are  truly  making  the  prophecy 
come  true  which  was  long  ago  implied  in  the  name.  The 
Peoples  Gas  Light  ^  Coke  Company.  -yY  j^ 


■'  ^\  'i^^ 


i7:B' .'41    -^ 


CllAl'TKR  1 

BefjinninfJi-s 

On  October  16,  1848,  a  group  of  men  already  prominent  in 
Chicago  and  destined  to  become  much  more  so,  gathered  in  the 
law  office  of  Norman  B.  Judd,  in  (jeorge  Smith's  Bank  Building 
at  Nos.  41  and  43  South  Clark  Street,  to  make  the  necessary 
application  to  the  Illinois  legislature  for  incorporation  in  order 
to  begin  the  manufacture  of  gas  for  the  city's  streets  and  houses. 
Those  who  signed  the  application  were  Hart  L.  Stewart,  post- 
master and  owner  of  the  hotel  later  known  as  the  St.  James; 
\V.  S.  Bennett;  Francis  C.  Sherman,  owner  of  the  Sherman 
House,  maker  of  much  of  the  lime  and  brick  that  was  building 
up  the  growing  town,  and  its  mayor  in  1841  and,  later,  in  1862- 
1863;  Peter  L.  Updike,  a  prosperous  real  estate  dealer  as  well  as 
a  contractor  and  builder,  and  Peter  Page,  another  builder  and  an 
alderman  for  the  Kirst  Ward,  which  in  those  da>s  lay  cast  of 
State  Street. 

The  first  boat  was  to  come  up  the  Illinois  River,  through  the 
Illinois  and  Michigan  Canal  and  thence  into  Lake  Michigan,  on 
April  10,  1849,  and  the  Canal,  so  long  the  commercial  hope  of  the 
place,  was  to  be  formally  declared  open  six  days  later  with 
appropriate  ceremonies,  to  do  from  the  first  a  rushing  business 


4  THE    PEOPLES   GAS    LIGHT   &   COKE   COMPANY 

with  passengers  and  freight.  Thus  was  placed  at  the  young 
city's  disposal  for  the  first  time  the  inexhaustible  supply  of  coal 
in  the  neighborhood  of  La  Salle,  by  which  the  manufacture  of 
gas  for  illuminating  purposes  was  made  commercially  possible. 

Coal  Scarce  and  Unused 

Theretofore  such  fuel  of  the  kind  as  Chicago  had  known  had 
come  in  sailing  vessels  from  the  East  over  the  Lakes,  and  was  ex- 
pensive in  comparison  with  the  universally  used  wood  for  every 
heating  and  cooking  use,  taken  from  the  forests  near  at  hand. 
Eighty  tons  had  been  brought  from  Erie  eight  years  before,  and 
it  had  taken  two  years  to  sell  it.  Indeed,  a  new  kind  of  grate, 
to  stand  on  legs,  had  to  be  invented  and  introduced  before  the 
coal  could  be  advantageously  burned. 

It  is  worthy  of  historical  note  that  it  was  near  La  Salle  and  in 
the  year  1680  that  the  first  practical  use  of  coal  in  the  New 
World  is  mentioned.  A  party  of  French  explorers  and  mission- 
aries, captained  by  La  Salle's  trusted  friend  and  lieutenant, 
Henry  de  Tonty,  him  of  the  iron  hand,  had  with  them  a  portable 
forge  in  which  the  new  fuel  was  tried.  They  noted  the  coal  as 
evil  smelling;  it  was  the  first  whiff  of  gas  to  reach  a  white  man's 
nose  in  the  Americas.  It  was  also  the  beginning  of  the  smoke 
nuisance,  of  which  more  will  be  said  later. 

As  a  further  incentive  to  the  introduction  here  of  the  first  of 
what  we  now  know  as  public  utilities,  gas  companies  had  already 
been  formed  in  Detroit  and  Cleveland,  both  much  older  and  in 
1840  more  populous  than  Chicago,  and  they  were  to  have  gas 
light  in  their  streets  and  houses  in  1849.  It  was  time  to  act  and 
the  place  for  action,  now  that  cheap  raw  materials  were  to  be 
afforded. 

First  Chicago  Company 

On  Monday,  February  12,  1849,  to  begin  his  week  well.  Governor 
Augustus  C.  French  signed  the  charter  of  the  company  at 
Springfield  after  its  passage  through  the  general  assembly.  It 
chanced  to  be  the  fortieth  birthday  of  one  of  Springfield's  rising 
lawyers,  Abraham  Lincoln,  who  had  retired  from  active  politics 
several  years  before  and  was  devoting  himself  to  building  up  a 
law  practice  that  was  presently  to  gain  for  him  as  clients  such 
great  corporations   as  the  projected   Illinois   Central   and   the 


75    VEARS    OF   r,.\S    SF.RVK   K    IN    C   Mlr\(.(> 


Micliigan  Central  Railroads.  Bui  it  is  doubtful  if  even  the  new 
gas  company's  attorney,  Mr.  Judd,  who  was  to  nominate  Lincoln 
for  the  presidency  at  the  Wigwam  here  ir)  -April,  1K^>(),  was 
aware  of  the  coincidence. 

The  act  conferred  broad  powers  upon  the  Chicago  Oas  Light 
and  Coke  Company,  and  conferred  them  in  perpetuity — "with 
perpetual  succession,"  in  the  words  of  the  charter.  The  company 
was  authorized  to  manufacture  and  sell  gas  to  be  used  for  lighting 
any  streets  and  buildings  in  Chicago  and  to  lay  mains  and  pipes 
for  that  purpose  in  any  of  its  streets,  lanes,  and  highways,  pro- 
vided no  permanent  damage  was  done  them  thereby,  with  no 
reference  to  consent  by  the  city  authorities  therefor.  It  was  given 
the  exclusive  right  to  supply  gas  to  the  city  and  its  people  for 
ten  years,  with  no  stipulation  limiting  its  charges  for  such  ser- 
vice. Its  capital  stock  was  fixed  at  ^^300,000  in  shares  of  $2S  each, 
and  it  was  allowed  to  hold  real  estate  not  to  exceed  )^50,()00  in 

value. 

The  Company's  Officials 

Officers  and  Directors  of  the  new  corporation  were  dulj'  elected 
by  its  stockholders  and  a  corporate  seal  adopted  on  October  16, 
1849.  The  Hon.  Hugh  T.  Dickey,  most  popular  as  the  first  judge 
of  the  Circuit  Court  of  Cook  County,  was  elected  President,  an 
office  he  was  to  hold  until  1873;  James  K.  Burtis,  a  lumber 
dealer,  became  Secretary  and  Treasurer;  and  the  Directors  were 
Thomas  Dyer,  forwarding  and  commission  merchant  in  South 
Water  Street,  to  be  Mayor  of  the  city  in  1862;  Francis  C.  Sher- 
man; Joseph  Keen,  Jr.,  a  bookseller  and  stationer  in  Lake  Street;- 
Mark  Skinner,  a  man  of  means  and  long  the  attorney  for  the 
corporation;  Franklin  Lee,  George  F.  Lee,  and  John  Lee, of  Phila- 
delphia, experienced  builders  of  gas  plants;  and  George  Smith, 
of  the  Wisconsin  Fire  and  Marine  Insurance  Company,  the 
promises  to  pay  of  which  were  illegally  in  use  as  bank  notes,  but, 
having  the  fortunate  quality  of  being  redeemed  when  presented, 
were  the  one  stable  currency  of  those  wild-cat  days.  Smith's 
name  was  a  guaranty  of  financial  stability,  but  all  named  were 
representative  and  energetic  men,  several  of  them  alrcad\  listed 
as  "old  settlers." 

The  First  Contracts 

On  October  lO,  lh4V,  the  first  contract  was  signed  between  the 
city  of  Chicago  and  the  gas  company,  wherein  the  right  to  lay 


6  THE    PEOPLES   GAS    LIGHT   &   COKE   COMPANY 

pipes  was  granted  and  the  monopoly  to  furnish  gas  was  assured 
until  February  10,  1858;  all  personal  property  taxes  were  remit- 
ted for  five  years,  and  good  gas  at  32.50  a  thousand  feet  was 
promised  for  the  street  lamps.  No  time  limit  was  mentioned  for 
doing  the  work  or  furnishing  gas  and  no  standard  set. 

The  next  day  a  contract  was  entered  into  between  the  Com- 
pany and  George  F.  Lee  &  Company  of  Philadelphia,  for  laying 
24,000  feet  of^mains, providing  gas  meters, and  building  a  manu- 
facturing plant  on  the  ground  purchased  at  Monroe  and  Market 
Street,  which  was  eventually  carried  through  to  Adams.  There 
were  to  be  a  brick  retort  house  to  contain  a  bench  of  seven 
furnaces,  a  brick  building  for  the  purifying  apparatus,  station 
meter,  and  governor,  which  was  to  house  the  counting-room  as 
well,  and  a  gas  holder  with  a  capacity  of  60,000  cubic  feet,  which 
was  to  be  the  capacity  of  the  plant  every  twenty-four  hours. 
All  this  was  to  be  provided  for  ^1 30,000,  payable  as  the  work 
progressed  up  to  ^80,000,  the  balance  of  350,000  being  secured  by 
first  mortgage  bonds  upon  all  the  real  and  personal  property  of 
the  Company,  bearing  interest  at  7  per  cent  and  due  two  years 
after  date.  George  F.  Lee  was  further  appointed  the  Engineer, 
with  a  salary  of  31,000  a  year  after  the  works  went  into  opera- 
tion. The  gas  was  to  be  carburetted  hydrogen  (coal  gas),  actu- 
ally of  about  14  candle  power,  though  this  remained  unspecified. 

Chicago's  First  Gas 

The  24,000  feet  of  mains  were  duly  laid,  a  thousand  feet  of  these 
being  ten  inches  in  diameter,  covering  the  principal  streets  down 
town,  and  an  underground  connection  was  made  with  the  River 
to  provide  the  water  necessary  in  manufacture.  Four  hundred 
tons  of  coal  were  laid  in  for  the  beginning  of  operations.  The 
City  Council  on  September  13,  1849,  ordained  that  no  street 
lamp  should  be  lighted  until  the  private  parties  chiefly  concerned 
should  bear  half  the  expense,  and  this  was  accomplished.  Gas  for 
private  persons  was  to  be  33  a  thousand,  with  a  discount  if  the 
monthly  bill  was  settled  promptly,  and  125  consumers  were 
secured,  in  addition  to  99  street  lamps  and  the  illumination  of 
the  city's  one  public  building. 

All  was  finally  in  readiness,  and  the  manufacture  of  gas  began 
on  August  28,  1850,  only  one  of  the  furnaces  being  fired.  On 


75    VEARS    OK   t;AS   SERVICE    IX   CHICAGO 


Wednesday,  September  4,  there  were  the  required  60,000  cubic 
feet  in  the  holder,  and  the  gas  was  let  into  the  street  mains 
during  the  afternoon  to  clear  the  air  from  mains  and  pipes. 
Stores  and  residences  were  deserted  to  see  the  unguarded  flames 
flicker  and  flare  before  they  settled  down  to  steady  work.  En- 
thusiastic consumers  began  lighting  tiieir  shops  before  twilight, 
and  as  the  sun  went  down  Chicago  rejoiced  in  what  was  the 
brightest  night  in  her  history,  and  another  step  was  taken  on 
the  long  upward  march  toward  metropolisation. 

What  the  Papers  Said 

The  next  afternoon  The  Evening  Journal  observed  of  the 
event:  "Some  of  the  stores  on  Lake  Street,  particular!)'  those 
devoted  to  California  ware,  made  a  brilliant  appearance,  and 
the  gas  lent  an  additional  glory  to  refined  gold.  But  the  City 
Hall,  with  its  thirty-six  burners,  is  the  brightest  of  all,  night 
being  transformed  to  mimic  day." 

The  next  Saturday  The  Gem  of  the  Prairie,  which  was  the 
weekly  edition  of  The  Chicago  Tribune,  had  more  to  say,  as 
follows: "Wednesday  marked  an  era  in  Chicago.  At  about  2 
o'clock  p.  M.  the  gas  pipes  were  filled  and  brilliant  torches 
flamed  on  both  sides  of  Lake  Street  as  far  as  the  eye  could  see, 
and  wherever  the  posts  were  set.  The  lanterns  not  having  been 
affixed  to  the  posts,  the  bright  gaseous  flame  eddied  and  flickered 
in  the  wind,  sometimes  apparent!}'  disappearing,  but  anon 
shooting  up  as  brightly  as  ever. 

"The  burners  in  Reed  &.  Co.'s  and  in  Keen's  were  lighted  about 
the  same  time,  presenting  a  bright  golden  flame.  We  believe 
these  establishments  had  the  honor  of  first  lighting  up  with 
gas;  others  will  not  be  much  behind  them.  In  the  evening  the 
lamps  were  again  lighted,  and  for  the  first  time  in  the  history  of 
Chicago,  several  of  the  streets  were  illuminated  in  regular  city 
style.  Hereafter  sIk-  will  not  'liidc  licr  liglit  under  a  bushel.'  " 

Glimpsing  Into  the  Past 

Something  of  the  life  of  that  distant  day  can  be  read  in  and 
between  the  lines  of  the  contemporaneous  statements.  Lake 
Street  was  then,  and  for  many  years  afterward,  the  principal 
business  thoroughfare  and  only  shopping  district.  By  "California 


8  THE   PEOPLES   GAS    LIGHT   &   COKE   COMPANY 

ware"  in  The  Journal's  account  was  meant  the  goods,  equip- 
ment, and  supplies  demanded  by  those  about  to  make  the 
long  overland  journey  to  the  Pacific  Coast,  where  gold  had  been 
discovered  at  the  beginning  of  1848,  and  was  at  that  moment  in 
its  highest  state  of  productiveness.  Nuggets  of  the  glistening 
stuff  had  evidently  been  placed  to  catch  the  newer  and  brighter 
light,  and  add  to  the  lure  of  sudden  riches  to  be  gained  for  the 
picking. 

The  "City  Hall"  was  in  the  Market  Building  erected  by  the 
city  government  in  January,  1848.  It  was  set  in  the  middle  of 
State  Street,  with  a  frontage  of  forty  feet  on  the  line  of  Randolph 
and  running  back  180  feet  toward  Lake.  The  first  of  our  muni- 
cipal buildings,  it  was  of  brick,  two  stories  in  height, and  it  cost 
311,070.  The  ground  floor  was  divided  into  thirty-two  stalls  for 
the  marketmen,  and  on  the  second  story  were  four  rooms,  one  in 
front  for  the  City  Clerk,  one  in  the  rear  for  a  non-existent  library 
(a  good  omen),  and  between  these  a  large  double  room  with 
folding  doors,  used  as  a  court-room  by  day  and  for  the  City 
Council  and  public  gatherings  by  night. 

''Reed  &  Co.'s"  was  the  drug  store  of  Josiah  H.  Reed  & 
Company  at  Nos.  144  and  146  Lake  Street;  and  "Keen's"  was 
Joseph  Keen  &  Brother,  No.  161  Lake  Street.  Keen  has  already 


Chicago  in  1851,  from  an  original  drawing  never  before  reproduced —  Courtesy  of 
Chicago  Historical  Society 


7n    years   ok  gas   service   in    CHK\f.() 


been  iiK'ntioncd  as  oir"  of  tlu'  Directors  of  the  Company, 
which  had  just  leased  tlie  floor  above  his  shop  at  5^75  a  year, 
to  provide  a  more  convenient  point  for  the  payment  of  the 
montlily  bills,  being  described  as  a  "very  central  place."  It  is 
pleasant  to  note  that  all  bills  were  promptly  paid  in  order  to 
v;et  the  discount  and  that  all  the  125  custonuTS  were  well  satis- 
tied  and  pleased. 

Making  A  Good  Start 

The  consumption  of  gas  at  the  beginning  averaged  about  15,000 
cubic  feet  a  night,  of  which  11,800  was  for  private  use.  On 
October  6,  1850,  it  was  found  necessary  to  use  the  second  fur- 
nace, increasing  the  output  to  22.(XX)  feet  for  the  twenty-four 
hours,  a  total  for  the  year  of  8,030.(X)0  cubic  feet.  With  the  help 
of  moonlit  nights,  when  the  street  lamps  were  not  lighted,  this 
was  expected  to  carry  the  Company  through  for  twelve  months. 
Ready  markets  were  found  for  coke  at  123^2  cents  a  bushel  and 
for  coal  tar  at  ^1.50  a  barrel,  prices  higher  than  had  been 
expected,  which  went  a  good  wa\'  in  pa^'ing  for  the  coal,  part  of 
which  could  be  had  during  navigation  from  eastern  coal  mines 
at  31.25  a  ton. 

At  the  beginning  of  1851  the  Company  paid  its  first  tax  bill, 
amounting  to  J^78. 80.  This  was  for  its  real  estate;  a  personal 
property  tax  was  also  levied,  which  was  eventually  compromised. 
(At  the  beginning  of  1925  the  taxes  accrued  of  The  Peoples  Gas 
Light  and  Coke  Company  amounted  to  32,506,542.75.  In  1924 
there  were  31,621,305,748  cubic  feet  of  gas  sold  in  Chicago.) 
On  May  13,  1851,  a  semi-annual  dividend  of  53-2  pc  cent  was 
declared  on  the  capital  stock  of  390,000,  and  dividends  were 
regularh'  paid  by  the  Chicago  Company  thereafter. 

Keeping  up  With  Population 

In  spite  of  many  elements  that  worked  against  the  larger  use  of 
gas  the  Company  kept  even  with  the  rapid  growth  of  the  city. 
The  city  grew  from  30,000  in  1850  to  1 10,000  in  1860,  in  spite  of 
the  disastrous  panic  of  1857  and  the  very  hard  times  which  fol- 
lowed, an  increase  of  367  per  cent;  in  the  same  time  the  Com- 
pany increased  the  number  of  miles  of  its  mains  from  five  to 
hfty-three,  or  more  than  1,000  per  cent,  and  the  number  of  its 
consumers  from  125  to  more  than  2.000,  or  more  iliaii  l,^00  per 
cent. 


lO  THE    PEOPLES    GAS    LIGHT   &   COKE   COMPANY 

In  March,  1853,  the  contract  was  let  for  a  main  under  the 
River  at  La  Salle  Street  for  supplying  the  North  Side  with  gas, 
and  four-inch  mains  were  ordered  laid  from  La  Salle  and  North 
Water  Streets  to  the  Chicago  &  Northwestern  Railroad  station 
and  on  both  sides  of  North  Clark  Street  as  far  as  Ontario.  Li 
the  spring  of  1854  a  similar  main  to  the  West  Side  was  laid  under 
the  River  at  Monroe  Street.  Meanwhile  a  holder  with  a  capacity 
of  300,000  cubic  feet  was  under  construction  at  Adams,  Monroe, 
and  Market  Streets  to  care  for  the  increase  of  business,  together 
with  a  manufacturing  plant  to  correspond.  Everything  on  that 
site  was  destroyed  in  the  Fire  of  1871  and  never  rebuilt. 

Facing  the  Future 

On  February  9,  1855,  an  amendment  to  the  original  charter  of 
the  Company  was  obtained  from  the  Illinois  Legislature,  w^hich 
authorized  the  Company  to  increase  its  capital  stock  to  31,000,- 
000,  to  borrow  such  money  as  it  needed  for  constructing,  carry- 
ing on  and  completing  its  work,  and  to  issue  bonds  therefor, 
and  which  also  legalized  all  bond  issues  previously  made  and 
gave  the  Company  the  right  to  acquire  all  such  real  estate  in 
Chicago  as  might  be  needed  for  its  business,  thus  removing  the 
restrictions  in  the  original  document. 

A  holder  on  the  North  Side  was  completed  in  1861  and  an- 
other main  from  the  shop  on  the  South  Side  was  carried  across 
the  River  at  Franklin  Street  to  supply  it;  this  time  the  main 
was  a  sixteen-inch  one,  in  contrast  to  the  four-inch  pipe  of  eight 
years  before.  On  May  20,  1859,  a  contract  was  entered  into 
between  the  City  Council  and  the  Company  whereby  gas  was 
to  be  furnished  for  ten  years  at  $2  a  thousand  feet,  a  reduction 
of  20  per  cent.  It  was  the  beginning  of  providing  cheaper  gas, 
sadly  interrupted  by  the  mounting  costs  of  labor  and  materials 
during  and  after  the  Civil  War,  then  less  than  two  years  away. 


>^^'6C 


^^''-^'- 


i  l/j 


I ,  I,  7 


CHAPTER  II 

Chicaf^o  Seventy-fi\  e  Years  A^o 

As  gas  is  the  oldest  of  the  indispensable  group  of  modern  con- 
veniences-becomc-necessiiies  now  known  as  public  utilities,  so 
was  it  the  first  to  enter  into  the  daily  lives  of  the  people  of  Chi- 
cago, as  elsewhere.  In  1850  and  for  many  a  busy  year  afterward 
it  was  thought  of  only  as  a  means  of  illumination;  its  develop- 
ments for  power,  for  warming  houses,  for  cooking  and  refriger- 
ation, and  for  every  purpose  for  which  controllable  heat  is  de- 
manded in  the  industries  is  a  story  not  yet  fully  told  nor  ended, 
part  of  it  growing  out  of  the  evolution  of  electricity. 

What  daily  life  was  in  the  enterprising  city,  which  was  born 
in  1837,  after  thirteen  years  of  civic  life  must  seem  incredible  to 
the  younger  people  of  today,  so  lacking  was  it  in  so  much  of 
what  we  now  look  upon  as  the  mere  decencies  of  existence. 
Indeed,  it  was  only  the  year  before,  in  1849,  that  Chicago  was 
at  its  worst  in  several  senses,  for  little  had  been  done  to  make  it 
habitable  beyond  laying  out  streets  and  building  houses,  and 
the  population  was  apparently  beyond  control,  so  great  had  been 
its  rush  to  arrive  and  so  rushing  the  daily  existence  upon  arrival. 


12  THE    PEOPLES   GAS    LIGHT   &   COKE   COMPANY 

Here  sprawled  an  incongruous  mess  of  hastily  constructed 
buildings,  for  habitation  and  business,  for  which  the  so-called 
balloon  frame  had  been  invented  that  they  might  be  thrown  to- 
together  with  the  greatest  saving  in  time  and  materials,  beauty 
of  architecture  being  undreamt  of. 

An  Assortment  of  Evils 

The  water  supply  was  wholly  inadequate  and  what  there  was 
of  it  was  bad.  Epidemics  of  cholera  appalled  the  town;  there 
was  one  in  1849.  Smallpox  was  always  a  threat.  Typhoid  was  a 
menace,  the  worse  for  ignorance  of  its  processes.  It  could  hardly 
be  otherwise  when  the  only  drainage  was  on  the  surface  of  the 
streets,  their  intersections  were  noisome  cesspools  and  the  ways 
themselves  were  filled  with  what  was  called  at  the  time  an 
"indescribable  liquid."  All  surface  waters  and  sewage  poured  into 
the  river,  with  the  result  that  for  many  years  it  held  an  abomina- 
ble stench.  There  was  no  flow  from  it  except  lazily  into  the  Lake 
for  pollution  there,  with  a  single  occasional  exception :  During  the 
Spring  freshet  the  Desplaines  overflowed  into  the  South  Branch 
by  way  of  Mud  Lake,  sometimes,  as  in  March,  1849,  bringing 
disaster  to  the  shipping  crowded  into  the  River  and  wrecking 
the  bridges  across  it;  the  damage  was  380,000  in  that  year. 
As  there  was  no  decent  water  in  the  town  until  1854,  two  years 
after  the  city  had  taken  over  the  waterworks,  as  there  was  no 
possible  sewage  system  until  the  South  Side  down  town  was 
raised  from  eight  to  fourteen  feet  above  its  natural  level  in 
1856-1858,  so  was  there  in  1850  no  protection  worthy  the  name 
against  devastating  fires,  however  willing  the  volunteer  firemen 
with  their  hand-engines  might  be  and  however  heroically  they 
worked  when  called  upon.  There  were  great  fires  then,  too, 
remembering  the  size  of  the  place,  as  on  October  27,  1839,  with 
a  375,000  loss  and  on  July  21,  1849,  when  the  loss  was  greater. 
The  first  steam  fire-engine  was  to  come  in  February,  1858,  after 
a  conflagration  on  October  19,  1857,  which  destroyed  twenty- 
three  lives  and  half  a  million  dollars'  worth  of  property. 

A  Metropolis  in  the  Egg 

The  boundary  of  Chicago  in  1850  ran  west  from  Lake  Michigan 
on  Center  Avenue  to  North  Clark  Street,  thence  south  to  North 
Avenue  and  on  this  west  to  Wood  Street.  South  in  Wood  Street 


7?  YEARS  OF  GAS  SERVICE  IN  CHICAGO 


it  marched  straight  four  miles  to  Twenty-second  Street,  and  on 
this  east  to  the  Lake  again,  the  wliole  containing  9.76  square 
miles.  Most  of  the  population,  whether  for  residential  or  busi- 
ness purposes  as  may  be  seen  in  connection  with  the  lists  of 
incorporators  of  the  gas  companies,  was  in  what  is  now  the  Loop. 
The  North  Side  stood  high  and  dry  and  would  have  been  prefer- 
able for  settlement  on  many  an  account,  but  properly  there  was 
held  at  a  figure  thought  too  high,  and  the  people  accordingl\' 
crowded  into  the  miry  ground  on  the  South  Side.  In  1850  there 
were  30,000  people  in  the  town;  in  1855, 80,000;  in  1860,  1 10,{KXJ; 
in  the  first  named  year  therefore  Chicago  was  about  the  size  of 
the  pleasant  cities  of  the  Fox  River  X'alley  today,  somewhat 
larger  perhaps  than  Klgin  and  rather  smaller  than  Joliet  and 
Aurora.  With  this  every  resemblance  abruptly  ends. 

Beginning  to  Hatch 

The  differences  lie  in  transportation  and  communication,  so 
far  as  the  outer  world  is  concerned;  still  more  largely  in  light- 
ing and  heating  and  the  intimacies  of  domestic  life  economically 
speaking.  After  a  brief  attempt  at  using  stone,  which  sank  into 
the  universal  mud  and  dropped  out  of  sight  in  less  than  two 
years,  five  miles  of  oak  planks  were  laid  on  the  swampy  streets 
of  Ciiicago  in  1849  and  1850.  Fifty  miles  more  of  plank  roads  ran 
from  town  to  various  points  more  or  less  consequential  north, 
south,  and  west.  Beyond  these  for  years  was  prairie  mud.  By 
1857  plank  roads,  hailed  as  a  deliverance  only  seven  years  before, 
had  proved  themselves  little  better  than  worthless,  and  more 
expensive  than  macadam.  Vet  there  followed  a  brief  attack  of 
cobble  stones,  as  in  State  and  Randolph  Streets,  and  then  wood- 
en blocks  everywhere,  most  of  which  caught  fire  and  burnt  up  in 
the  fire  of  1871.  .Xs  a  matter  of  course  passenger,  mail,  and  express 
services  were  contingent  upon  the  weather,  as  was  all  freighting 
and  travel  by  land  to  and  from  the  city.  In  1850  the  first  timid 
omnibuses  began  to  run,  and  nine  years  later  the  first  street-cars. 
There  had  been  a  little  strap-rail  railroad  running  out  to  the 
Desplaines  River  opened  in  1848,  and  on  February  1,  1849,  it 
had  reached  Elgin — an  occasion  for  public  celebration.  It  was 
called  the  Galena  &  Chicago  Union — note  the  sequence  of 
names — and  is  now  a  part  of  the  Chicago  &  Northwestern 
system.  The  Michigan  Southern  ran  its  first  train  from  the  Hast 


14  THE    PEOPLES    GAS    LIGHT   &   COKE   COMPANY 

into  Chicago  on  February  20,  1852;  the  Michigan  Central  on 
May  21  following.  The  Illinois  Central  did  not  get  its  through 
line  here  until  January  1,  1857,  though  it  began  the  city's  first 
suburban  service  as  far  as  Hyde  Park  in  1856.  All  other  travel 
on  land  was  done  by  stage  coaches,  dangerous  to  life  and  limb 
by  reason  of  the  outrageous  roads  and  lack  of  bridges. 

The  Lake,  while  navigation  was  open,  was  the  most  reliable 
and  safest  means  of  transportation  for  every  purpose,  in  spite 
of  numerous  wrecks,  but  it  failed  utterly  during  the  colder 
months.  The  first  steamboat  had  arrived  on  July  10,  1832, 
bringing  General  Winfield  Scott  and  a  contingent  of  the  regular 
army  to  the  Black  Hawk  War,  only  to  be  stricken  down  with  the 
cholera  epidemic  then  raging,  with  a  resultant  quarantine  in 
what  is  now  Riverside.  In  1850  there  were  several  steamboat 
lines  in  more  or  less  regular  operation,  but  an  arrival  was  still 
important  enough  to  be  heralded  by  a  display  of  no  less  than  six 
flags  flown  in  the  harbor,  when  no  small  share  of  the  populace 
honored  it  with  their  attendance  in  quite  the  spirit  of  those  one 
sees  at  way  stations,  from  an  express  train.  As  in  antiquity, 
water  carriage  held  supremacy,  buttressed  by  the  opening  of 
the  Illinois  and  Michigan  Canal  in  1849,  after  thirteen  years  of 
digging  more  or  less  desultory,  preceded  by  twenty  years  of 
discussion  and  financing  more  or  less  futile. 

Facilities  and  Lack  of  Them 

Postal  facilities  were  of  course  dependent  upon  mail  carriers, 
stage  coaches,  and  the  state  of  the  post-roads,  mere  paths  in 
the  wilderness.  In  1850  there  were  no  letter  boxes,  no  deliveries 
at  home  or  office,  no  sub-stations.  If  one  wished  to  mail  a  letter 
one  went  to  the  postoifice  at  No.  50  Clark  Street  near  the 
Sherman  House.  If  one  wished  to  get  a  letter  the  same  travel  was 
necessary  after  waiting  an  hour  and  a  half  for  distribution  after 
the  irregular  mail  came  in.  A  written  order  was  required  to  get 
mail  for  another.  A  messenger  or  a  visit  in  person  was  necessary 
for  any  speedy  communication  in  town.  Nearly  thirty  years 
were  to  pass  before  a  telephone  could  be  used. 

The  first  electric  telegraph  message  was  received  on  January 
15,  1848.  It  came  from  Milwaukee,  and  it  is  worth  noting  that, 
like  the  railroads,  the  first  communication  was  not  with  the 


75   VEARS   OF   CAS    SERVICF    IN'    CHICACO  IC 

East.  It  was  the  April  6  following  that  the  first  dispatch  arrived 
from  Detroit  and  the  Atlantic  seaboard.  And  this  was  the  be- 
ginning of  the  use  of  electricity  for  any  practical  purpose, 
telephones,  dynamos,  lights,  trolley  cars,  power  transmission, 
annunciators,  elevators,  and  the  rest  being  undreamt  of.  Yet 
these  today  are  no  longer  luxuries  nor  conveniences,  but  a  part 
of  every-day  civilization,  along  with  mail  boxes,  postmen, 
special  delivery  letters,  and  telegrams  reported  by  telephone  or 
written  on  a  typewriter. 

Public  Buildings 

The  first  public  building  of  the  municipality,  as  has  been  noted, 
was  opened  on  January  1,  1848.  In  1842  the  square  on  which 
now  stands  the  city  hall  and  county  building  was  in  such  a  state 
of  shameful  neglect  that  public-spirited  citizens  of  their  own 
motion  abated  the  nuisance,  clearing  the  ground,  planting  trees, 
and  buidling  a  fence  to  prevent  its  further  use  as  a  dumping 
ground  for  rubbish;  the  newspapers  of  the  day  then  found  fault 
with  them  for  not  thoroughly  whitewashing  the  fence  built  by 
their  own  money  and  exertions. 

In  December,  1850,  the  agitation  for  an  adequate  public 
building  to  house  both  the  city  and  county  governmental 
authorities  began.  After  an  active  dispute  between  the  two  was 
settled  the  cornerstone  of  the  first  monumental  structure  in 
town  was  laid  on  September  1,  1851.  It  was,  as  originally  de- 
signed and  finished,  of  admirable  dimensions  and  much  beauty 
of  design,  such  as  could  be  worthily  reproduced  today  as  a 
memorial.  Later,  alas,  another  story,  a  new  cupola,  and  two 
discordant  wings  were  added  and  occupied  in  1870,  in  time  to  be 
destroyed  in  the  Cireat  Fire  and  thus  a  material  but  not  an 
esthetic  loss. 

Heating  and  Ligliting 

With  gas  in  1850  came  the  first  of  the  scientific  inventions  and 
discoveries  which  now  enabled  civilized  men  to  make  a  single 
movement  of  the  hand  and  thereby  obtain  light,  heat,  power, 
speech  at  a  distance,  rapid  transportation,  vertically  or  hori- 
zontally, a  ringing  bell  or  other  signal,  and  a  hundred  other 
conveniences  grown  to  necessities  whose  very  commonness 
causes  them  to  be  taken  for  granted.  If  in  that  distant  day  heat 


l6  THE   PEOPLES   GAS    LIGHT  &   COKE   COMPANY 


was  desired  wood  was  brought  from  a  distance  upon  oral  or 
written  order,  paper  and  kindling  had  in  readiness,  a  fire  laid 
on  a  hearth  or  in  a  stove,  a  match  used  to  light  it  and  then 
gradual  warmth.  When  out — and  out  it  went  without  constant 
attention — there  were  ashes  to  be  disposed  and  more  supplies 
eventually  laid  in,  adding  to  the  trouble,  expense,  and  dirt  of 
the  moment.  When  coal  came  into  general  use,  the  case  was 
little,  if  any  better. 

Candles  then  afforded  the  easiest — and  dimmest — form  of 
interior  illumination,  and  these,  for  the  amount  of  light  given 
out,  were  also  the  most  expensive.  Otherwise  a  lamp  had  to 
be  bought  with  its  chimney,  wick,  and  lighting  fluid,  and  con- 
stantly tended  thereafter  to  keep  it  useful.  Whale  oil  with  its 
disagreeable  odor  was  in  demand  and  the  alternative  was 
camphene,  which  is  turpentine  from  which  its  resins  have  been 
distilled,  demanding  a  strong  draft  to  keep  its  flame  from  smok- 
ing. With  kerosene  or  coal  oil  ten  years  later  the  danger  of  ex- 
plosion was  added.  Lamps  were  an  improvement  upon  anything 
that  had  gone  before,  but  they  again  set  a  burden  of  trouble 
and  expense  upon  the  shoulders  of  their  users. 

Engines  and  Elevators 

There  were  then  no  engines  which  could  be  set  going  by  a  move- 
ment of  the  fingers.  There  was  no  refrigeration  by  which,  a 
valve  once  turned  and  a  match  applied,  the  need  of  further 
thought  of  ice  was  gone  for  months.  Nor  was  there  any  apparatus 
on  earth  by  which  water  might  be  instantly  heated  for  washing 
or  bathing,  or  a  house  warmed  throughout  a  Chicago  winter 
without  defilement  of  the  rooms  within  or  the  atmosphere  with- 
out by  soot  and  other  dirt. 

There  were  few  elevators  or  lifts  in  Chicago  before  the  Civil 
War,  and  these  were  slow,  hesitant,  and  productive  of  accident 
with  the  steam  engines  of  that  day.  In  1861  they  were  still  so 
unusual  that  the  new  Sherman  House,  opened  that  June, 
advertised  that  "A  perpendicular  railroad  connects  floor  with 
floor,  rendering  passage  by  the  stairs  unnecessary." 

To  ring  a  bell  in  that  day  meant  giving  a  hard  pull  at  a  handle 
or  cord  which  tensed  a  wire  and  gave  an  eventual  signal  else- 
where when  it  was  in  order,  and  it  was  frequently  out  of  order; 


75    VEARS    or    CAS    <;rR\IC  r    IN-    CHICACO  17 

annunciators  of  any  other  kind  were  unkiujwn.  It  was  iliirty 
years  before  an  electric  spark  was  used  for  liKhiinj;  gas,  and  in 
the  streets  the  lamplighter  made  his  slow  progress  with  his 
torch  at  twilight,  and  another  in  the  morning  to  extinguish 
the  flame  so  lighted.  One  has  not  to  be  a  grandparent  to  rcincm- 
ber  this. 

It  is  true  that  Chicago's  atmosphere  was  not  so  much  of  a 
nuisance  in  that  elder  day,  and  trees  lined  many  a  downtown 
street  and  flourished  in  the  Court  House  Square;  but  the  grow- 
ing use  of  gas  for  heating  everywhere  and  for  every  purpose 
contains  the  only  effective  promise  for  doing  away  with  the 
smoke  nuisance  as  with  a  thousand  other  bothers,  cares,  and 
worries,  such  as  infested  the  da>s  and  nights  of  seventy-five 
years  ago. 

Formation  of  Civic  Pride 
Yet  even  then  Chicago  had  shown  and  was  showing  what  was 
in  her.  Disease,  mire,  and  flame  were  alike  powerless  against 
the  spirit  of  her  people.  It  is  hardly  enough  to  say  of  them  that 
diflftculties  seemed  to  exist  chiefly  that  they  might  be  triumphed 
over.  The  channels  in  which  their  early  endeavors  were  being 
trained  enabled  them  to  surmount  even  greater  calamities  and 
catastrophes  later.  The  civic  pride  which  pulled  her  out  of  a 
noxious  morass  and  rebuilt  her  after  almost  total  destruction 
by  fire  is  still  the  fountain  from  which  flows  the  successful  effort 
— gigantic  almost  to  the  point  of  incredibility — to  make  fully 
effective  every  dream  of  the  Chicago  Plan  Commission. 

And  in  this  growth  and  development,  sharing  the  city's 
victories  and  defeats,  its  weakness  and  its  strength,  the  local  gas 
companies,  united  at  last  under  a  single  management,  have  had 
no  insignificant  share. 


CHAPTER  III 

Division 

On  Feburary  12,  1855,  Governor  Joel  A.  Matteson  signed  the 
bill  creating  The  Peoples  Gas  Light  and  Coke  Company,  the 
only  survivor  now  of  many  similar  efforts  at  competition.  Could 
the  old  monopoly  have  been  preserved  and  adequately  super- 
vised by  governmental  authority,  and  could  the  unsoundness  of 
competition  in  public  utility  service  have  been  recognized,  much 
time,  effort  and  money  might  have  been  saved  the  city,  its 
people  and  the  gas  companies  themselves.  It  was  more  than 
half  a  century  before  the  lesson  was  finally  learned,  and  then 
only  in  the  difficult  and  expensive  school  of  experience. 

It  will  be  noted  that  by  one  of  those  curious  and  meaningless 
coincidences  with  which  human  life  abounds  the  new  company 
was  six  years  to  a  day  younger  than  its  predecessor,  again  in- 
volving Abraham  Lincoln's  birthday.  By  this  time  the  great 
liberator  was  forty-six  years  old,  and  he  was  now  fully  embarked 
on  the  political  career  which  was  to  make  him  President  of  the 
United  States.  He  had  been  elected  to  the  Illinois  legislature  a 
few  months  before,  and  was  already  its  leader,  as  the  only 
member  of  it  able  and  willing  to  oppose  the  powerful  Stephen 
A.  Douglas  with  any  chance  of  success. 


"•f    YEARS    OK    CAS    S  K  R  \' U"  K    !  N    rH!C"A(;<)  19 

The  incorporators  of  the  new  company,  like  those  of  its  fore- 
runner, were  well  known  men  in  town,  as  follows:  L.  C.  Paiiu- 
Freer,  attorney  and  master  in  chancery  at  No.  51  South  Clark 
Street;  Matthew  Laflin,  already  prosperous,  with  his  office  at 
No.  49  South  Water  Street  and  his  residence  at  No.  1  Washing- 
ton Street;  Amos  G.  Throop,  from  whom  Tliroop  Street  takes 
its  name,  a  real  estate  broker  at  No.  49  South  Sangamon  Street, 
then  an  alderman  from  the  Fifth  Ward;  David  A.  Gage,  then  of 
the  Tremont  House  and  later  of  the  Sherman  and  Grand 
Pacific,  with  a  spectacular  career  as  City  Treasurer  ahead  of 
him;  John  S.  Wallace,  a  dealer  in  lumber  living  at  Slate  Street 
and  Ridgely  Place;  George  W.  Snow,  also  a  lumber  dealer,  but 
described  in  an  early  directory  simply  as  "colonel,"  with  his 
house  at  No.  74  Jackson  Street;  Robert  H.  Foss,  another  dealer 
in  lumber  with  his  yard  at  Monroe  and  Canal  Streets  and  his 
residence  at  Monroe  and  Throop;  and  Henry  B.  Bay,  manufac- 
turer of  dredging  and  excavating  machinery  at  Nos.  61  and  63 
Canal  Street. 

New  Company  Starts  Slowly 

As  in  the  former  group,  it  is  instructive  to  see  how  many  lead- 
ing men  were  concerned  with  the  material  upbuilding  of  the 
city,  which  had  grown  from  30,000  in  1850  to  80,000  in  1855. 
Small  wonder  attention  was  paid  to  real  estate  and  its  improve- 
ments in  the  face  of  such  demand. 

To  these  men  and  their  associates,  with  perpetual  succession, 
was  given  the  right  to  hold  all  real  property  up  to  $100,000  in 
value  necessary  for  the  purposes  of  making  and  selling  gas  in 
Chicago  on  and  after  February  12,  1859,  and  sooner  if  the  earlier 
company  should  consent.  The  capital  stock  of  the  corporation 
was  not  to  exceed  $500,000,  and  it  was  named  as  an  "express 
provision"  that  gas  was  to  be  furnished  the  city  at  not  more 
than  $2  a  thousand  cubic  feet,  and  not  more  than  $2.50  to  its 
people.  This  appears  to  be  the  first  exercised  control  of  corpora- 
tion rates  of  public  utilities  by  the  general  assembly;  and  not  a 
particularly  fortunate  one  in  the  light  of  what  was  to  follow 
within  very  few  years. 

The  year  of  incorporation  was  prosperous  enough,  to  be  sure, 
but  the  panic  of  1857  was  already  on  its  way,  with  the  threat  of 


20  THE    PEOPLES   GAS    LIGHT   &   COKE   COMPANY 

secession  in  the  air  and  civil  war  just  below  the  horizon.  Men 
who  had  ready  money  were  using  it  to  maintain  their  business 
credit  and  not  for  subscription  to  any  speculative  enterprise, 
such  as  a  new  gas  company  must  be  until  the  prohibitive 
monopoly  expired  by  its  terms.  Accordingly,  one  by  one  nearly 
all  the  original  subscribers  faded  from  the  scene,  and  it  was  more 
than  three  years  before  its  first  meeting  to  incorporate  was  duly 
held. 

This  was  on  October  11,  1858,  when  Robert  H.  Foss,  an  orig- 
inal subscriber,  was  chosen  President  and  Henry  W.  Zimmerman 
Secretary.  Foss  was  also  a  Director,  and  his  colleagues  on  the 
Board  were  Amos  G.  Throop,  Sextus  N.  Wilcox,  of  Wilcox  & 
Lyon,  a  lumber  dealer  living  at  No.  143  South  Peoria  Street, 
Joshua  L.  Marsh,  an  attorney  with  several  kinsmen  in  the 
lumber  business,  and  Philo  D.  Mickles  of  the  eastern  house  of 
Mickles,  Dickson  &  Mickles,  contractors,  who  was  expected  to 
do  for  the  new  concern  what  the  Lees  of  Philadelphia  had  done 
for  the  older  one.  The  meeting  was  held  in  the  law  offices  of 
Marsh  &  King  at  No.  76  South  Dearborn  Street,  and  the  junior 
in  this  firm  was  John  Lyle  King,  a  notable  figure  in  those  days. 

Further  Difficulties 

The  intervening  time  had  not  been  wholly  idle.  On  August  30, 
1858,  the  city  council  passed  an  ordinance  empowering  the 
Peoples  Company  to  lay  mains  under  strict  supervision  and  only 
after  consultation  with  the  mayor  or  city  superintendent  of 
works  and  further  express  permission  from  the  council  itself 
with  still  another  proviso  that  for  any  pipes  laid  during  the 
duration  of  the  Chicago  Company's  monopoly  that  Company's 
permission  should  first  be  obtained.  This  was  something,  but  it 
did  not  do  much  to  help  the  sale  of  the  new  company's  stock. 
But  land  was  bought  for  the  present  station  at  Twenty-second 
Street  and  Racine  Avenue  and  work  started  on  it  for  a  manufac- 
turing plant  and  gas  holder,  leaving  it  in  the  oldest  of  the  present 
Company's  works.  In  December,  President  Foss  was  also 
elected  Treasurer.  April  12,  1859,  a  contract  was  made  with  the 
city  for  street  lighting,  and  a  few  days  later  Artemas  Carter,  a 
lumber  commission  merchant  with  yards  at  South  Water  near 
Lake  and  at  Stewart  and  Lumber  Streets,  living  at  No.  175 
South  Jefferson  Street,  and  Hugh  Maher,  still  another  lumber- 


"■  ;    VFARS    OF    CAS    S  K  R  \' I  C  F    IV    CM  If  A  CO 


man,  were  elected  Directors.  Tlic  by-laws  having  fixed  the  num- 
ber in  the  Board  at  five,  this  action  was  rescinded  later. 

The  difficulties  in  raising  money  increased  rather  than  dim- 
inished. At  the  close  of  1S59  the  People's  Company  attempted  to 
raise  )^50,(XX)  in  New  York  to  complete  the  works.  A  few  weeks 
later  the  interest  of  seven  per  cent  proposed  for  the  loan  was 
raised  to  "not  exceeding  ten  per  cent,"  and  in  July,  1861,  the 
principal  sum  sought  was  raised  to  J^100,(XX),  after  both  Mickles, 
Dickson  &  Mickles  and  the  Trenton  Locomotive  is:  Machinery 
Contracting  Company  had  failed  to  complete  the  work. 

Cutting  the  Knots 

During  the  interval  a  new  force  projected  itself  into  the  local 
situation  in  the  person  of  Albert  Merriit  Billings.  He  was  a 
shrewd  Vermonter  who  had  made  a  small  fortune  in  a  factory 
for  making  yeast  which  he  had  established  in  Claremont,  N.  H. 
This  small  place  was  also  the  headquarters  of  the  American  Gas 
Light  Company,  which  owned  a  patent  for  purifying  gas  with 
water  in  which  he  acquired  an  interest.  In  1859  he  came  to 
Chicago  and  sold  the  right  to  use  the  purifying  process  to  the 
Peoples  Company,  and  was  obliged  to  take  notes  at  six  and  nine 
months  in  payment.  This  led  him  to  a  close  examination  of  the 
state  of  the  Peoples  Company's  affairs  and  to  an  investment  in  it. 

On  February  26,  1861,  Billings  was  elected  a  director.  On 
May  22  next  it  was  officially  recorded  that  after  most  diligent 
efforts  the  Company  had  not  been  able  to  make  any  disposition 
of  securities  that  would  allow  it  to  complete  its  manufacturing 
plant.  The  next  day  a  contract  was  made  with  Cornelius  K. 
Garrison,  in  which  Billings  had  a  share,  for  building  the  gas 
works.  But  the  Company  had  to  make  a  second  mortgage  on  all 
its  property  for  }^240,000  at  ten  per  cent  on  June  17,  and  for 
further  security  the  entire  concern  was  leased  to  Garrison  and 
Billings  for  ninetj-nine  years,  the  mortgage  being  only  a  part 
payment. 

On  July  23  the  first  designation  of  streets  in  which  mains 
were  to  be  laid  was  made  to  the  Board  of  Public  Works,  and  in 
September  Garrison  was  authorized  to  buy  all  the  pipe  he  needed 
and  it  was  left  to  his  discretion  whether  or  not  he  should  use  any 


22  THE    PEOPLES   GAS    LIGHT   &  COKE   COMPANY 

part  of  it  for  crossing  tlie  River  or  its  branches.  On  June  1, 
1862,  the  Peoples  Company  was  thus  enabled  to  begin  the  manu- 
facture and  distribution  of  gas. 

Billings's  connection  with  Garrison  went  back  to  1859,  when 
the  latter  had  newly  come  to  New  York  from  San  Francisco, 
where  he  had  built  up  a  fortune.  Both  men  were  looking  for 
business  chances,  both  were  versatile  and  of  varied  experience, 
and  each  recognized  in  the  other  a  kindred  spirit.  So  it  was 
Pacific  Coast  and  Yankee  capital  brought  by  way  of  the  Atlantic 
seaboard  which  finally  enabled  the  Peoples  Gas  Company  to 
help  illuminate  Chicago  in  the  Middle  West.  And  it  was  Billings, 
with  the  aid  of  a  Board  of  Directors  long  identified  with  the 
West  Side,  as  he  himself  became  in  1864  and  so  remained,  who 
conceived  and  put  into  practice  the  idea  of  dividing  the  city 
area  between  his  own  and  the  older  corporation.  Threatened 
competition  with  cheaper  gas  was  potent  in  procuring  an  agree- 
ment from  the  Chicago  Company  to  confine  its  business  to  the 
North  and  South  Sides,  as  the  discretion  reposed  in  Garrison 
about  entering  that  territory  shows.  On  April  23,  1862,  the 
Chicago  Company  sold  to  the  Peoples  the  thirteen  miles  of 
mains  it  had  laid  and  owned  on, the  west  side  of  the  River,  and 
it  never  actually  entered  that  district  or  attempted  to  do  so 
until  1886. 

Amending  the  Charter 
On  February  7,  1865,  a  private  law  was  enacted  by  the  legisla- 
ture of  the  State.  By  this  the  restriction  on  the  amount  of  real 
estate  the  Company  might  own  was  removed;  the  limit  of 
the  capital  stock  was  raised  to  3500,000  with  the  right  to 
increase  it  from  time  to  time  at  the  pleasure  of  the  corpora- 
tion; the  limitation  of  the  price  to  be  paid  for  gas  by  the 
city  and  its  people  was  stricken  out  and  in  its  stead  the  city  was 
empowered  to  regulate  prices  but  only  after  ten  years  had  ex- 
pired and  only  then  with  the  reservation  that  the  price  should 
not  be  reduced  below  $3  a  thousand  cubic  feet;  and,  finally,  the 
Company  was  empowered  to  borrow  money  and  to  lease  or 
mortgage  any  of  its  properties  or  franchises  for  that  purpose.  On 
October  26,  1865,  Billings  was  elected  the  President  of  the  Com- 
pany, an  office  he  was  to  hold  until  succeeded  by  his  son  in 


75    YEARS    OF   GAS   SERVICF    IN    CHlCA(;o 


23 


188S.  Artemas  Carter,  who  had  been  chosen  President  on  May 
25,  1861,  was  Billings's  predecessor. 

The  Civil  War  with  the  depreciation  of  currency  ensuing  upon 
it  greatly  increased  the  price  of  all  materials  used  in  the  making 
and  distributing  of  gas;  coal  went  to  5^13  a  ton,  for  example. 
The  marching  away  of  a  million  men  led  to  profound  distur- 
bances in  the  world  of  work  as  well,  with  consequent  increases  in 
labor  costs.  In  the  taxation  measures  necessary  for  financing  the 
war  was  included  an  impost  of  25  cents  a  thousand  feet  for  il- 
luminating gas,  to  be  accounted  for  and  paid  monthly,  Sep- 
tember 1,  1862,  the  war  tax  was  added  to  all  gas  bills,  public  and 
private.  This  order  was  rescinded  on  September  17,  and  enforced 
again  on  April  4,  1864,  there  to  remain  until  September  1,  1871, 
when  it  was  abolished  by  the  government.  On  July  25,  1864, 
the  price  of  gas  was  raised  to  $3  a  thousand  feet,  and  on  May  1, 
1865,  to  34.25,  including  the  war  tax.  Even  then  there  was  an 
occasional  month  when  the  cost  of  manufacture  exceeded  the 
price  received.  On  December  22,  1865,  lots  were  bought  on  the 


} 


.Scene  at  (.'hlca^o  Fire.  |H71      rcprnJuccJ  by  courtesy  of 
Chlcnifto  Hiftlorlcul  Society 


24  THE    PEOPLES   GAS    LIGHT   &   COKE   COMPANY 


north  branch  of  the  River;  on  July  17,  1867,  a  new  station  was 
ordered  built  thereon;  and  on  March  6,  1871,  a  thirty-inch  main 
across  the  River  at  Dearborn  Street  to  the  new  plant  was  put 
in  the  way  of  construction. 

Prosperity  and  Calamity 

The  Chicago  Company,  until  the  Great  Fire  of  1871,  was  for- 
tunate in  having  no  history.  By  that  year  it  had  135  miles  of 
mains,  and  the  demand  for  gas  increased  so  rapidly  that  it 
began  spending  3300,000  on  the  works  at  Crosby  and  Hobbie 
Streets,  which  are  still  in  operation  and  known  as  the  North 
Station.  The  annual  consumption  of  coal  had  gone  to  72,000 
tons.  On  September  6,  1869,  land  was  bought  at  Eleanor  and 
Loomis  Streets  on  the  South  Side  for  works  which  were  built 
the  next  year  and  are  now  known  as  the  South  Station.  In 
February,  1870,  a  discount  of  50  cents  per  thousand  cubic  feet 
was  made  to  private  persons  who  paid  their  bills  before  the  12th 
of  the  month,  and  for  the  first  time  special  rates  were  authorized 
to  large  consumers. 

The  Peoples  Company  also  showed  a  steady  growth,  but  in 
the  effort  to  clear  away  its  initial  indebtedness,  it  paid  no 
dividends  until  1874.  On  November  30,  1868,  its  credit  had 
reached  the  point  where  it  was  able  to  market  3750,000  in 
twenty-year  bonds  at  seven  per  cent,  using  the  money  to  pay 
and  cancel  the  original  first  and  second  mortgages. 

Then,  beginning  about  9  o'clock  on  Sunday  evening,  October 
9,  1871,  such  a  fire  devastated  Chicago  as  history  had  not  previ- 
ously recorded.  Beginning  on  the  West  Side  it  spread  north  and 
east  with  hastening  ferocity,  scorching  out  the  business  district 
down  town,  all  of  it,  and  eliminating  the  North  Side,  burning 
over  1688  acres,  destroying  a  third  of  all  the  real  and  personal 
property  in  the  town  valued  at  3186,000,000,  including  18,000 
buildings  of  every  sort  from  palaces  to  hovels,  which  had  housed 
100,000  souls,  and  doing  it  in  about  twenty-seven  hours. 
Summing  up,  it  swept  over  more  than  an  acre  a  minute,  on  an 
average,  with  a  loss  of  3100,000  every  eight  minutes.  For 
thousands  it  seemed  to  spell  immediate  and  utter  ruin. 

Fire  and  Gas 

The  flames  started  in  De  Koven  Street,  a  little  before  9 
o'clock   Sunday   night.   At    1   o'clock   Monday   afternoon   The 


7<:    VEARS    OF   GAS    SKRVlCi:    INI    lUICACO 


Chicago  Journal,  its  offices  and  printing  plant  gone,  managed  to 
get  into  the  remaining  streets  the  first  printed  account  of  the 
disaster,  liaving  secured  a  press  at  No.  15  Canal  Street.  Its 
account  reads  in  part  as  follows:  "At  about  10  o'clock  last  night 
the  sheet  of  flames  licked  across  the  River  in  the  neighborhood 
of  Jackson  Street,  first  igniting  a  small  wooden  building,  which 
communicated  the  fire  to  the  Armory,  and  soon  to  the  South 
SideCjas  Works,  the  immense  gasometer  exploding  with  a  fear- 
ful detonation,  heard  all  over  the  city." 

There  is  menti(Mi  in  the  countless  other  stories  of  the  Fire 
written  afterward  of  the  explosions  of  various  substances,  but 
no  other  mentions  that  of  gas  though  the  burning  of  the  station 
receives  due  notice.  For  example,  James  \V.  Sheahan  and 
CJeorge  P.  Upton,  both  of  The  Chicago  Tribune,  say  in  their 
carefulh'  written  book:  "Right  and  left  the  flames  spread  as 
fast  as  a  man  could  walk,  and  soon  the  gas  works  and  huge  piles 
of  coal  in  the  yards  took  fire,  and  a  red  glare  shone  all  over  the 
doomed  city."  William  S.  Walker,  another  trained  observer  and 
writer,  says:  "At  nearly  the  same  time  (it  was  actually  about 
12:30  Monday  morning),  the  tar  works  belonging  to  the  South 
Division  gas  manufactorj',  situated  on  Adams  Street  near  the 
Armory,  were  ignited.  *  *  *  In  less  than  five  minutes  a  square  of 
buildings  was  in  flames." 

What  Actually  Happened 

i'he  Journal's  report  merely  reflects  the  popular  belief,  without 
foundation  in  fact,  that  a  holder  filled  with  gas  can  explode. 
Before  gas  can  explode,  it  is  absolutely  nccessar)'  that  it  shall  be 
mixed  with  air  tt)  provide  the  elements  for  detonation;  otherwise 
the  gas  will  burn  in  quantity  as  steadily  as  in  a  chandelier  or 
stove.  What  happened  at  the  old  works  on  that  dreadful  night 
was  what  will  happen  whenever  a  similar  emergency  arises:  the 
man-holes  in  the  holder  were  opened  wide  as  soon  as  the  doom 
of  the  plant  was  assured  by  the  onrushing  flames  and,  as  is 
wholly  probable  in  this  case,  without  igniting.  Had  the  gas 
chanced  to  take  fire  while  it  was  thus  pouring  forth  it  would 
have  burnt  with  a  roar  and  much  smoke,  but  with  nothing 
approaching  a  tremendous  explosion.  As  a  matter  of  fact,  the 
Adams  Street  holder  was  standing,  unexploded,  on  its  original 


l6  THE    PEOPLES   GAS    LIGHT   &   COKE   COMPANY 


site  until  February,  1879,  when  it  was  sold  to  A.  C.  Clark  for 
33,000. 

Another  tale,  which  excludes  the  possibility  of  explosion,  was 
often  repeated  at  the  time  and  may  be  found  in  the  histories,  and 
attempts  to  account  for  the  apparent  burning  of  buildings  from 
within  rather  than  from  any  cause  without.  It  states  that  the 
gas  from  the  holder  in  Adams  Street  was  turned  into  the  sewers 
and  rising  thence  into  the  structures  along  the  line  of  march  of 
the  flames  caused  the  spread  of  the  conflagration  and  with 
greater  rapidity.  Apart  from  the  impossibility  of  such  a  diver- 
sion, since  there  is  no  connection  between  the  mains  leading 
from  the  holder  to  the  sewers  nor  could  gas  be  forced  from  one 
to  the  other  without  much  pressure,  this  story  errs  on  the  other 
side.  Gas  introduced  into  any  building  in  such  a  manner  would 
of  necessity  be  mixed  with  air,  with  the  result  that  every  such 
building  would  not  merely  have  ignited  but  would  have  blown 
up — with  a  fearful  detonation.  None  did. 

At  the  North  Station 

By  much  presence  of  mind  and  the  hardest  sort  of  hard  work 
long  continued,  the  North  Station,  bounded  by  Hawthorne 
Avenue  and  Haines,  Hobbie,  and  Crosby  Streets,  was  saved 
from  the  general  immolation  of  the  North  Side;  most  fortunately 
so,  for  without  this  new  plant  and  the  new  main  at  Dearborn 
Street  the  North  and  South  Sides  would  have  been  left  without 
gas.  As  the  fire  was  seen  approaching,  the  station  pumps,  taking 
their  water  from  the  inexhaustible  supply  in  the  north  branch 
regardless  of  the  early  destruction  of  the  city  water  works,  were 
set  to  work  and  manned.  Everything  inflammable  was  drenched 
with  water  in  steady  streams,  and  particularly  the  huge  coal 
shed  containing  thousands  of  tons  of  soft  coal  in  a  wooden 
building  200  feet  long,  100  feet  broad,  and  40  feet  in  height. 
Voluntary  recruits  from  the  burnt  station  at  Adams  Street  were 
welcomed  as  reinforcements,  and  every  precaution  was  taken 
during  the  hours  when  every  building  north  and  south  and  east 
was  attacked  and  conquered. 

These  precautions  probably  would  not  have  saved  the  North 
Station  without  the  help  had  from  the  highly  eccentric  course  of 
the  fire  itself,  due  in  good  part  to  the  efi'ect  of  its  own  intense 
heat  in  turning  the  heavy  wind  from  the  prairies  into  whirls 


"  ;    ^KAK^    OK    <;A>^    SKR\UK    in    t'HICA<.<) 


21 


and  eddies.  Along  the  north  branch  both  above  and  below  North 
Station,  tlie  billowing'  flanu-s  surged  and  leaped.  But  from  the 
junction  of  the  north  branch  with  the  river  north  nearly  to 
Ohio  Street,  and  again  opposite  Goose  Island  and  west  of 
Crosby  Street,  there  was  no  fire  though  the  quarter  of  a  mile  of 
buildings  between  these  two  areas  was  swept  over  and  every 
house  therein  destroyed. 

The  Twenty-second  Street  works  of  the  Peoples  Company 
were  of  course  untouched.  But  there  is  no  record  of  any  gas 
being  supplied  from  this  source  to  the  North  and  South  Sides, 
nor  was  there  any  tunnel  across  the  River  available  for  that 
purpose.  The  demand  for  gas  was  greatly  decreased,  of  course, 
by  the  loss  of  shops,  offices,  and  residences,  17,000  in  number  in 
these  two  divisions,  and  the  North  Station,  newly  built  and 
working  at  capacity,  its  connecting  mains  through  town  and 
under  the  River  unharmed,  sufficed  to  supply  the  houses  still 
standing  as  soon  as  the  leakage  could  be  stopped  amidst  the 
ruins  of  the  burnt  district. 

Improvements  and  Extensions 

.\  week  after  the  fatal  Monday,  on  October  17,  1871,  W'alkins 
was  elected  a  Director  of  the  Chicago  Company,  new  offices  were 
occupied  in  place  of  those  destroyed  at  No.  76  Dearborn  Street, 
and  other  steps  taken  to  repair  and  mitigate  the  damages 
suffered.  Before  the  end  of  the  year  it  was  decided  not  to  rebuild 
on  the  old  site  in  Adams  Street  but  to  rush  the  work  on  the  South 
Station.   Early   the   next   year  the  sale  of  the  property  there 


Fire  Enitlne  uu.l 


iiird-ay  of  ( JiUmU"  MlKdirKul  Soiiely 


28  THE    PEOPLES   GAS    LIGHT   &   COKE   COMPANY 


began.  On  January  13,  1873,  Elias  T.  Watkins  was  elected 
President  of  the  Company,  Judge  Hugh  T.  Dickey  retiring 
after  more  than  twenty-two  years  of  service  in  that  capacity. 
The  new  station  at  Eleanor  and  Loomis  Streets  began  operat- 
ing on  November  15,  1874.  Work  was  begun  at  another  station 
at  Thirty-first  and  Halsted  Streets  to  supply  gas  to  the  rapidly 
growing  district  to  the  southwest.  An  additional  3300,000  was 
ordered  expended  on  the  North  Station,  doubling  its  capacity 
for  production  and  distribution.  Five  miles  of  mains  were  laid  in 
1872,  eight  in  1873,  and  soon,  until  in  1881  the  Chicago  Company 
had  more  than  200  miles  of  supply  pipes  in  use  and  of  sizes  in- 
creasingly large.  The  Peoples  Company,  also  showing  a  steady 
increase  in  the  volume  of  its  business,  in  1881  completed  its 
works  at  Division  Street  and  Elston  Avenue,  still  in  operation. 
It  may  here  be  mentioned  that  the  dividends  paid  by  the 
younger  Company  in  1874,  amounting  during  the  year  to  three 
per  cent,  were  the  only  dividends  paid  while  A.  M.  Billings  was 
in  authority. 

Hyde  Park  and  Pullman 

There  were  other  manufacturers  of  gas  soon  in  the  field,  and  one 
of  the  humors  of  the  situation  was  the  purchase  in  1879  of  the 
private  plant  that  the  Tremont  House  had  been  attempting  to 
run.  These  other  gas  companies  were  situated  at  the  time  of 
their  beginnings  outside  of  the  city  limits,  though  the  areas  they 
served  were  all  included  within  Chicago  in  the  general  sweep  of 
June  29,  1889,  when  the  western  metropolis  swallowed  all  its 
neighbors  in  readiness  for  the  World's  Columbian  Exposition  of 
1892  and  1893. 

The  first  of  these  was  the  Hyde  Park  Gas  Company,  which 
was  incorporated  May  26,  1871,  under  a  general  statute  for  the 
formation  of  manufacturing,  mining,  and  other  companies.  Its 
term  was  fixed  at  fifty  years,  and  the  village  of  Hyde  Park 
empowered  the  Company  to  build  a  plant  and  lay  its  mains 
north  of  the  center  line  of  Sixty-seventh  Street,  with  a  clause 
providing  for  the  purchase  of  these  by  the  village. 

George  M.  Pullman  included  gas  works  in  the  Pullman  Com- 
pany's plans  for  its  manufacturing  suburb  at  Pullman  in  1880 
and  they  were  operated  until  the  Supreme  Court  decided  that  was 
beyond  the  powers  accorded  in  the  Company's  charter.  The  entire 


-C    >   KAKx    OK    <:AV    sKR\U   K    I\    C   HU\(,f> 


equipment  was  acquired  by  the  Peoples  Company,  on  Septem- 
ber 1,  1899,  usable  parts  were  removed,  and  the  ma^ufacturiIl^,' 
plant  dismantled.  A  similar  fate,  so  far  as  removal  and  dis- 
mantling are  concerned,  eventually  overtook  the  jMaiit  of  the 
Hyde  Park  Company. 

Lake  and  Lake  View 

The  Lake  Gas  Company  was  incorporated  November  2,  1881, 
under  the  general  incorporation  law  of  1872.  Its  business  was 
confined  to  the  town  of  Lake  under  an  ordinance  to  the  North- 
western Gas  Works  Company,  which  was  assigned  to  the  Lake 
Comptany. 

Here  may  be  included  the  Suburban  Gas  Company,  formed  on 
September  30,  1884,  under  the  general  law,  to  lay  mains  and 
supply  gas  in  the  city  of  Lake  \'iew.  This  concern  was  a  subsi- 
diary of  the  Chicago  Gas  Light  and  Coke  Company,  whose 
charter  limited  its  direct  operations  to  the  city  of  Chicago.  The 
Suburban  bought  its  gas  from  the  Chicago  Company  and  dis- 
tributed it  through  its  own  mains,  having  no  manufacturing 
facilities.  After  annexation  to  Chicago  in  1889  it  sold  its  property 
to  the  Chicago  Company  for  }^600,000. 

With  the  passing  of  the  year  1881  the  period  of  divided  areas 
without  competition  also  passes,  to  be  followed  by  si.xtcen  years 
of  intense  competition  before  the  need  for  consolidation  became 
a  necessity  as  apparent  as  it  was  absolute  if  justice  was  to  prevail, 
whether  to  stockholder,  bondholder,  consumer,  or  municipality. 


CHAPTER  IV 

Multiplication 

Active  competition  in  manufacturing  and  selling  gas  in  Chicago 
was  ushered  in  by  the  organization  of  the  Consumers  Gas  Fuel 
and  Light  Company  on  December  30,  1881,  under  the  general  in- 
corporation act  of  1872.  Its  incorporators  were  well  known 
figures  in  the  city's  mercantile  and  political  life,  including 
James  W.  Brockway,  Allen  C.  Calkins,  a  successful  lumberman, 
George  H.  Harlow,  Marcus  A.  Farwell,  a  wholesale  grocer  and 
long  the  president  of  the  Oakwoods  Cemetery  Association,  and 
the  Hon.  Richard  S.  Tuthill,  a  good  lawyer  and  admirable 
judge  for  many  years  in  the  Circuit  Court. 

On  April  29,  1882,  the  Company  was  granted  authority  by  the 
city  council  to  lay  gas  mains  in  the  streets  of  Chicago — anywhere 
in  the  city.  At  this  time  the  Chicago  Gas  Light  and  Coke  Com- 
pany was  confining  its  operations  to  the  North  and  South  sides 
and  the  Peoples  Company  to  the  West  side.  The  Consumers 
Company  bound  itself  not  to  charge  more  than  ^1.75  a  thousand 
feet  for  its  product,  with  a  rebate  of  25  cents  a  thousand  to 
customers  using  more  than  100,000  cubic  feet  a  year.  Combina- 
tion with  any  other  company  concerning  the  price  of  gas  or 
transfer  of  any  of  its  rights  to  another  concern  was  forbidden. 


•^C  YFARS  OF  CAS  SFRVICK  IN  CHICAGO  II 

The  Consumers  Company  proceeded  to  the  erection  of  a 
plant  at  Twenty-fourth  Place  and  Canal  Street,  to  lay  mains, 
and  to  compete  actively  for  business  with  the  older  companies. 
The  Chicago  Company  reduced  the  price  of  gas,  which  had  been 
$\.7S  since  May  3,  1880,  to  }^1.25  a  thousand  feet  in  the  Kail  of 
1883,  and,  after  the  Consumers  had  entered  the  West  Side 
through  a  tunnel  under  the  river  at  Taylor  Street,  the  Peoples 
Company  reduced  its  price  to  J^l.50  to  meet  the  new  compe- 
tition. But  the  Consumers  Gas  Fuel  and  Light  Company  found 
its  undertaking  too  heavy.  To  finance  it,  a  trust  deed  for 
J52,000,000  was  given  to  Dumont  Clarke  and  bonds  issued  to 
that  amount.  This  was  foreclosed  in  the  United  States  Circuit 
Court  on  July  15,  1886,  and  the  property  bouL'ht  in  In  John  T. 
Lester,   who  continued   the   business. 

From  Light  to  Heat 

Thereupon  the  Consumers  Gas  Company  was  organized  on 
August  9,  1886,  with  a  capital  stock  of  J^5,000,000  which  was 
subscribed  for  by  a  number  of  prominent  men,  the  largest  share 
being  that  of  Frederick  P.  Addicks,  secretary  and  treasurer  of 
the  earlier  concern.  The  Directors  chosen  were  Columbus  R. 
Cummings,  William  S.  Rayburn,  Sidney  A.  Kent,  W.  H. 
Ryder,  Charles  T.  Yerkes,  E.  Washburn,  J.  Edward  Addicks, 
John  B.  Cohrs,  and  C.  E.  Judson,  the  last  named  being  Presi- 
dent, with  C.  F.  Bryant  the  Secretary.  The  Consumers  Gas  Com- 
pany then  bought  the  Consumers  Gas  Fuel  and  Light  Company 
property  held  by  John  T.  Lester  under  foreclosure.  The  charter 
powers  of  the  new  company  were  broad;  they  included  the  right 
to  sell  gas  for  illuminating,  heating,  and  other  purposes,  and  to 
buy  or  lease  gas  works  or  gas  companies  in  Chicago  or  elsewhere 
and  to  improve,  enlarge  and  extend,  maintain  and  operate  or 
demise  the  same.  Thf  mention  of  gas  for^'hfating"  here  first  finds 
place  in  local  gas  history.  Among  other  things  the  new  Company 
proceeded  to  do  was  to  sell  gas  to  its  former  competitors. 

The  use  of  the  word  "Fuel"  in  the  title  of  the  first  Consumers 
Company  and  thereafter  by  others  in  connection  with  the  mak- 
ing of  gas  for  "heating"  is  significant  at  this  time  as  showing  the 
trend  of  the  gas  business  away  from  the  sole  purpose  of  providing 
light,  which  has  been  stressed  almost  exclusively  up  to  this  time. 
In  the  coming  shift  the  discovery  and  commercial  use  of  natural 


32  THE   PEOPLES   GAS    LIGHT   &   COKE   COMPANY 

gas,  especially  in  the  neighboring  State  of  Indiana,  was  to  have 
an  important  part,  as  will  presently  be  nianifest.  But  the  con- 
clusive factor  was  the  growth  of  electric  lighting,  due  so  largely 
to  the  inventive  and  organizing  genius  of  Thomas  A.  Edison. 
In  October,  1878,  the  engineer  of  the  Chicago  Gas  Light  & 
Coke  Company  newly  returned  from  visiting  the  Universal 
Exposition  in  Paris,  mentioned  electric  lighting  for  the  first 
time  and  then  rather  as  an  experiment  than  as  an  accomplished 
fact.  But  it  was  destined  to  remove  gas  from  the  field  of  illumi- 
nation to  a  degree  fairly  inconceivable  at  that  time,  and  send  it 
on  its  way  to  supplying  a  cheap,  clean,  and  entirely  manageable 
fuel,  at  first  for  domestic  uses  in  cooking  wholly  subordinated  to 
lighting,  and  then  more  and  more  to  domestic  heating  and  after- 
ward, following  the  manufacturing  use  of  natural  gas  in  the 
middle  eighties,  to  every  purpose  for  which  heat  under  complete 
control  can  be  utilized  in  manufacturing  and  industry. 

Emphasizing  A  Turning  Point 

One  unexpected  result  of  the  entrance  of  competition  in  the 
gas  business  in  Chicago  affords  a  rather  curious  little  prophecy 
of  this.  In  the  strenuous  efforts  of  competing  companies  to  retain 
or  obtain  customers,  various  novel  inducements  were  held  forth 
and  among  these  were  hot  plates  and  nursery  burners,  given 
free  to  persuade  patronage  rather  than  to  increase  the  con- 
sumption of  gas.  There  were  simple  and  inexpensive  devices  for 
cooking  at  home  through  the  agency  of  a  rubber  tube  attached 
to  the  nearest  gas  burner,  yet  they  were  the  foreshadowing 
of  the  highly  efficient  and  elaborate  gas  ranges  of  today,  white 
enameled  and  nickel  plated,  and  the  pride  of  many  a  house- 
keeper in  parts  of  the  city  supposed  to  be  populated  by  merely 
poor  and  honest  people.  Only  some  dozen  of  years  comes  be- 
tween the  introduction  of  such  plates  and  burners  and  the  re- 
ported sale  by  the  Peoples  Company  up  to  December  31,  1898, 
of  a  total  of  20,343  gas  stoves,  a  number  now  exceeded  annually. 
Thisisanopportune  place,  although  out  of  line  chronologically, 
for  citing  certain  fundamental  changes  which  have  come  to  the 
gas  business,  as  seen  both  from  the  inside  and  the  outside,  in 
direct  descent  from  that  early  employment  of  gas  for  heat  instead 
of  light,  as  in  the  hot  plate  and  the  nursery  burner. 


The  gas  stove  literally  forced  itself  upon  the  aitcntion  of  gas 
companies.  By  1K98,  as  reflected  in  the  annual  report  of  the 
Peoples  Companj-  for  that  year,  gas  stoves  had  become  so  sale- 
able and  the  eflPect  of  their  use  upon  company  income  had  be- 
come so  obvious  that  pushing  the  sale  of  them  soon  took  rank 
as  a  major  gas  company  activity.  That  was  a  turning  point  in  the 
gas  business  in  Chicago. 

Establishinji  Cas  as  Fuel 

The  proved  practicabiliiy  of  gas  as  a  fuel  opened  up  possi- 
bilities never  dreamed  of  before  and  even  then  only  partially 
sensed.  As  illustrating  the  latent  market,  it  is  still  told  how  one 
ingenious  salesman  mounted  a  gas  stove  on  a  one-horse  wagon, 
drove  out  into  the  foreign  language  neighborhoods,  ran  a  rubber 
hose  from  the  stove  to  a  street  lamp  and  gave  open  air  demon- 
strations that  produced  orders  for  gas  stoves  faster  than  they 
could  be  filled. 

Interest  in  seeing  that  the  stoves  sold  were  dependable  for 
continuous  service  naturally  followed.  Krom  tliis  it  was  but  a 
step  to  specifications  that  would  promote  reliable  stove-building 
and  to  testing  laboratories  for  proving  the  results. 

Aggressive  campaigning  for  new  business  by  developing  new 
uses  for  gas  and  new  users  of  it,  commercially  and  industrially 
as  well  as  domestically,  which  is  now  a  major  item  in  gas  com- 
pany practice,  really  dales  from  that  1898-1900  period.  It  marked 
the  beginning  of  a  transformation  whereby  the  gas  business 
eventually  became  of  less  concern  as  a  feature  of  the  stock 
market  and  of  greater  concern  as  a  manufacturing  and  mer- 
chandising and  community-serving  industry.  But  before  this 
transformation  could  be  completed  or  the  progress  of  it  even 
clearly  seen,  the  gas  business  in  Chicago  had  to  go  through  a 
long  period  of  travail  compounded  of  illogical  competition,  clash 
of  financial  interests,  political  huckstering,  re-actionary  legis- 
lation and  samples  of  practically  cver\'  known  form  of  corporate 
affliction. 

Moves  and  Countermoves 

The  Equitable  Gas  Light  and  Fuel  Company  was  incorporated 
August  3,  1885,  for  ninety-nine  years  with  a  capital  stock  of 
33,000,000  to  make  "gases  of  all  kinds"  and  dispense  the  same  in 
Chicago  and  vicinity,  with  a  restrictive  clause  against  combi- 


34  THE    PEOPLES   GAS    LIGHT   &   COKE   COMPANY 

nation  with  any  other  concern.  Its  incorporators  and  officers 
were  also  interested  in  the  Peoples  Gas  Light  and  Coke  Company. 

On  November  16,  1885,  the  Illinois  Light,  Heat  and  Power 
Company  was  organized  by  forces  friendly  to  the  Peoples 
Company.  This  Company  never  asked  permission  to  lay  mains; 
its  business  was  solely  making  and  selling  gas.  It  took  over  the 
shop  and  station  at  Division  Street  and  Elston  Avenues. 

This  Division  Street  plant  is  historically  important  as  the 
first  one  in  Chicago  designed  and  built  for  the  manufacture  of 
carbureted  water  gas  exclusively — that  is,  without  any  coal 
gas  benches— although  water  gas  had  been  made  here  earlier. 

Water  Gas  Arrives 

Professor  Thaddeus  S.  C.  Lowe  obtained  patents  in  1872  on  a 
process  (more  properly,  on  the  apparatus  essential  to  the  pro- 
cess) for  making  carbureted  water  gas.  This  process  is,  with 
slight  modications,  still  in  use.  The  product  is  "carbureted 
water  gas,"  commonly  called  "water  gas,"  because  a  hydrogen 
gas  is  made  by  passing  steam  through  incandescent  beds  of  coke 
or  coal  and  is  then  "carbureted"  or  enriched  by  adding  other 
elements  derived  from  oil. 

This  invention  revolutionized  gas  making.  It  gave  gas  lighting 
a  new  lease  of  life,  in  competition  with  the  electric  lighting  of 
those  days,  because  carbureted  water  gas  made  a  better  light 
than  coal  gas.  The  naphtha  and  crude  oil  used  in  making  it 
were  then  abundant  and  cheap  and  there  were  little  or  no  by- 
products, which,  in  coal  gas  making,  were  becoming  an  embar- 
rassment for  lack  of  a  profitable  market  for  them.  The  labor 
required  to  run  a  water  gas  plant  was  only  a  fraction  of  that 
required  for  a  coal  gas  plant. 

Some  water  gas  appears  to  have  been  made  at  the  Twenty- 
second  Street  works  of  the  Peoples  Gas  Light  &  Coke  Company 
about  1879  or  1880,  but  the  Division  Street  plant,  begun  in 
1882  and  put  into  operation  in  1883,  was  as  stated  the  first 
exclusively  water  gas  plant.  Before  1890  all  of  the  gas  works  in 
Chicago  were  making  water  gas  and  the  old  coal  gas  process 
had  been   entirely   abandoned. 

On  February  16,  1883,  Theobald  Forstall  was  employed  as 
superintendent  and  general  manager  of  the  Chicago  Gas  Light 


75    VEARS    OK   CAS    SKRVICK    IS'    CHICAGO  7< 

&  Coke  Company,  becoming  also  a  Vice-President  and  Director. 
His  reports  for  the  year  18S5  and  1S86  indicate  that  the  com- 
pany's plant  capacity  and  facilities  had  become  inadequate. 
Its  maximum  daily  production  has  been  forced  to  5,300,000 
cubic  feet  of  gas  while  the  purifiers  and  holders  had  a  capacity 
for  only  4,000,000.  A  more  agressive  policy  began  to  show  re- 
sults in  better  manufacture  and  better  service  by  1886.  No 
doubt  this  was  stimulated  by  the  competition  of  the  Consumers 
Company  which  was  still  active.  From  the  beginning  of  the  race 
in  1883  the  Chicago  Company  recorded  a  loss  of  7867  customers 
of  whom  4935  had  been  recovered  in  1886,  while  the  net  gain 
from  new  business  was  9627  over  all  loss. 

Competition  and  Compromise 

On  March  12,  1887,  Elias  T.  Watkins  resigned  as  President 
and  Forstall  was  elected  in  his  place.  At  the  same  time  a  com- 
plete change  was  effected  in  the  Board  of  Directors,  reflecting 
the  entrance  of  interests  which  had  been  concerned  in  promoting 
the  Consumers  Company.  Men  who  had  been  identified  with 
the  corporation  almost  from  its  beginning  gave  place  to  Colum- 
bus R.  Cummings,  Jacob  Rehm,  Sidney  A.  Kent,  William  L. 
Elkins,  P.  A.  B.  Widcner,  and  others,  the  two  last  named  being 
residents  of  Philadelphia. 

Just  before,  in  May  1886,  the  spirit  of  competition  invaded 
the  Chicago  Company's  seemingly  assured  conservatism  and  it 
secured  permission  to  lay  mains  under  the  river  for  the  invasion 
of  the  People's  preserves  on  the  West  Side.  In  July  the  invader 
was  halted  by  an  injunction.  Eventually  the  courts  held  that 
the  agreement  between  the  two  old  companies  not  to  compete 
was  void,  contrary  to  public  policy,  and  so  on.  But  competition 
was  not  a  part  of  the  policy  of  the  Chicago  company's  new 
directorate,  nor  of  the  Peoples  Company.  For  a  radical  change 
in  government  had  also  taken  place  there. 

In  June,  1882,  C.  K.  G.  Billings,  the  younger  son  of 
Albert  M.,  was  graduated  with  honors  from  Racine  College  and 
forthwith  installed  by  his  father  as  superintendent  of  the 
Peoples  Company.  He  was  not  yet  of  age,  but  his  early  and 
continuing  interest  in  its  affairs  warranted  his  employment.  In 
April,  1884,  he  was  elected  Vice-President  and  in  1887  made  a 


36  THE    PEOPLES    GAS    LIGHT   &   COKE   COMPANY 

Director.  His  father's  policy  of  paying  no  dividends  worth 
mentioning  (though  it  had  given  the  company  a  very  strong 
position),  and  of  meeting  competition  by  radical  reductions  in 
gas  rates,  made  little  appeal  to  him.  He  therefore  allied  himself 
with  the  eastern  interests  now  in  control  of  the  Chicago  Company 
which  were  buying  stock  with  a  view  to  consolidation.  A  con- 
test between  father  and  son  ensued,  conducted  in  the  best  of 
spirit.  Youth  won.  On  April  28,  1888,  A.  M.  Billings  having 
resigned  from  the  Presidency,  C.  K.  G.  Billings  was  chosen  his 
successor.  From  1862  to  1888  under  the  father  and  from  1888  to 
1910  under  the  son,  there  was  forty-eight  years  of  Billings  con- 

Consolidation  Frustrated 

The  Chicago  Gas  Trust  Company  was  organized  under  the 
general  incorporation  Act  on  April  7,  1887,  to  put  the  gas  busi- 
ness in  Chicago  under  consolidated  control.  At  the  beginning  of 
1887  the  eight  companies  already  particularized  were  functioning 
as  such,  but  they  were  controlled  by  four,  the  Chicago,  the 
Peoples,  the  Consumers,  and  the  Equitable.  The  Gas  Trust 
bought  the  controlling  interest  in  these  four  and  proceeded  to 
handle  the  situation  under  a  trust  agreement.  This  first  attempt 
at  a  general  consolidation  was  the  beginning  of  complicated 
litigation  that  ran  on  for  nearly  ten  years.  One  after  another 
the  courts  nullified  every  expedient  that  lawyers  could  devise 
under  then  existing  statutes  for  effecting  consolidation. 

Back  of  all  this  litigation  was  the  implied  belief  that  con- 
solidation was  essentially  an  evil.The  whole  question,  solely  one 
of  economics  and  therefore  of  demonstrable  proof,  was  thrown 
into  partisan  politics,  not  always  scrupulous  before,  then  or 
since,  which  took  it  out  abruptly  from  the  realm  of  science  and 
reason  into  the  misty  borderlands  of  prejudice  and  emotion. 
Just  as  the  old  competition  had  resulted  and  was  resulting  at 
the  moment  in  duplicated  and  wasteful  efforts  to  be  borne 
ultimately  by  the  community,  just  so  the  emotional  and  spas- 
modic attempts  to  cheapen  the  price  of  gas  without  a  careful 
weighing  of  every  factor  entering  into  its  manufacture,  one  of 
the  most  important  and  least  regarded  of  these  being  the  main- 
tenance of  the  financial  credit  of  the  Companies,  resulted  in  a 
wild  war  of  loose  words,  needless  indignation,  and  wasted  legal 
proceedings,  again  at  the  expense  of  the  community. 


-C    NKAR>i    OK    <;AS    sKK\UK    IN    I  HIIAC.O  17 

Going  back  in  this  complicated  narrativcother  companies  had 
entered  the  field  in  the  meantime  in  addition  to  those  already 
mentioned,  and  these  must  be  taken  into  due  account  in  the 
final  outcome. 

More  Competition 

On  October  30,  1885,  came  the  Calumet  (las  Company  which 
operated  in  the  village  of  Hyde  Park  and  chiefly  in  the  region 
near  the  Calumet  River  with  a  plant  at  Ninety- sixth  Street 
and  Houston  Avenue,  still  in  use. 

Another  Hyde  Park  concern,  the  Mutual  Fuel  (^as  Company, 
was  incorporated  on  April  20,  1889.  Its  plant  at  Seventy-third 
Street  and  Langley  Avenue  made  an  almost  odorless  water  gas 
'that  lent  itself  to  accidents  and  the  process,  otherwise  admirable, 
had  to  be  changed.  It  also  became  a  distributor  of  the  product 
of  the  Universal  Gas  Company,  incorporated  July  16,  1894. 
The  Universal's  plant  at  Pitney  Court  and  Thirty-first  Street 
(still  in  use)  was  at  the  time  reputed  to  be  the  largest  gas  factory 
in  the  history  of  the  industry,  having  a  capacit)-  of  12,(XK),(XXJ 
cubic  feet  a  day.  It  remained  primarih'  a  manufacturing  con- 
cern, selling  its  gas  chiefly  to  the  Mutual  Fuel  Company  but 
eventually  to  the  older  corporations. 

For  the  more  complete  entanglement  of  Chicago's  gas 
affairs  the  Chicago  Economic  Fuel  Gas  Company  was  launched 
on  July  8,  1890,  and  authorized  at  first  to  distribute  only  fuel 
gas,  a  limitation  later  removed  by  the  city  council.  Pursuant  to 
its  original  fuel  gas  intention,  it  utilized  the  Indiana  Natural 
Gas  and  Oil  Company  to  bring  natural  gas  into  the  city.  Ensued 
one  of  the  most  destructive  periods  of  competition.  The  Econ- 
omic Company,  as  nearly  as  one  can  come  at  the  facts  from  this 
distance,  appears  to  have  been  backed  by  Eastern  financial  inter- 
ests and  its  chief  purpose  seemed  to  be  to  force  "recognition"  by 
the  older  and  more  prosperous  companies.  Eventualh'  the 
Economic  ceased  to  compete. 

Last  of  Gas  Wars 

The  last  and  one  of  the  most  energetic  of  the  competing  concerns 
was  the  Ogden  Cjas  Company,  organized  on  February  23,  1895, 
and  given  a  fift)-year  franchise  by  the  city  council  with  the 
now  usual  provisions  forbidding  merger  with  another  company, 


38  THE   PEOPLES   GAS   LIGHT  &  COKE  COMPANY 

reserving  to  the  city  the  right  to  purchase,  and  so  on.  The  com- 
pany was  bound  to  sell  gas  to  private  users  at  90  cents  a  thousand 
cubic  feet  net,  which  was  ten  cents  below  the  prevailing  rate,  and 
(another  innovation)  to  pay  the  city  annually  33^  per  cent  of  its 
gross  income.  Mains  were  laid  through  a  considerable  district 
on  the  North  Side  and  a  plant  was  built  at  Kingsbury  and  Willow 
Streets  that  could  make  between  3,000,000  and  4,000,000  cubic 
feet  of  gas  a  day  and  is  still  effective  for  distribution. 

Meanwhile  the  legislature  had  passed  an  act  in  1897  which 
permitted  consolidation  of  all  gas  companies  in  Chicago  and 
much  of  the  consolidating  had  been  effected,  as  will  appear  in 
the  next  chapter,  but  the  Ogden  was  still  an  independent,  selling 
gas  at  90  cents  and  extending  its  business.  The  Municipal  Gas 
Company,  organized  on  August  27,  1900,  leased  the  mains  of 
the  (consolidated)  Peoples  Company  lying  in  Ogden  territory, 
bought  gas  of  the  Peoples  Company,  began  selling  it  at  60  cents 
in  competition  with  the  Ogden's  charge  of  90  cents,  and  even 
went  down  to  40  cents.  Such  impracticable  rate  cutting  could 
not  continue  long.  The  Municipal  Company  eventually  dropped 
out  and  in  a  few  months  its  charter  was  surrendered.  Absorption 
of  the  Ogden  Company  later  on  ended  the  illogical  and  unecon- 
omic era  of  competition  in  the  gas  business. 


l>f'i^ 


CHAPTER  V 

Consolidation 

On  June  5,  1897,  Governor  John  R.  Tanner  signed  "An  Act  in 
Relation  to  Gas  Companies"  which  had  just  been  passed  by  the 
general  assembly  of  Illinois.  By  its  provisions  any  gas  company 
was  authorized  to  sell  its  property  and  franchises  at  will  to 
another  gas  company  in  the  same  city,  and  any  gas  company  was 
permitted  to  merge  and  consolidate  with  another  into  a  single 
corporation,  which  could  be  either  one  of  the  two  so  merging. 

Under  this  enabling  act,  on  August  2,  1897,  the  Peoples  Gas 
Light  and  Coke  Company  took  into  its  organization  its  venerable 
senior,  the  Chicago  Gas  Light  and  Coke  Company,  and  its  vari- 
ously aged  juniors,  the  Consumers  Gas  Company,  the  Illinois 
Light,  Heat  and  Power  Company,  the  Lake  Gas  Company,  the 
Equitable  Gas  Light  and  Fuel  Company,  the  Suburban  Gas 
Company,  and  the  Chicago  Economic  Fuel  Gas  Company.  The 
stock  of  the  absorbing  Company  was  exchanged  for  that  of  the 
absorbed  at  various  rates  as  settled  by  mutual  agreement,  and 
the  Peoples  Company  assumed  5^29,046,000  in  bonds  issued  by 
the  absorbed  companies. 

Although  the  stock  of  the  Hyde  Park  Gas  Company  was 
controlled  by  the  Consumers  Company,  to  the  rights  of  which 
the  Peoples  Company  had  now  succeeded,  it  did  not  come  within 


40  THE   PEOPLES   GAS    LIGHT   &  COKE   COMPANY 

the  scope  of  this  initial  merger,  but  was  finally  taken  over  Janu- 
ary 10,  1898.  On  the  same  day  the  stock  of  the  Mutual  Fuel  Gas 
Company  was  retired  and  cancelled  and  itself  included  in  the 
body  politic  of  the  Peoples. 

On  November  25,  1898,  the  Calumet  Gas  Company  was  taken 
in.  On  November  1,  1900,  a  contract  was  made  for  purchase  of 
the  Ogden  Gas  Company  in  1945,  subject  to  any  prior  right  of 
the  city  to  buy  it.  This  was  followed  by  an  ineffectual  attempt 
by  the  city  authorities  to  revoke  the  Ogden  Company's  rights. 

On  July  12,  1906,  the  Peoples  Company  acquired  the  Indiana 
Natural  Gas  and  Oil  Company  by  guaranteeing  its  bonds  and 
continued  to  receive  and  distribute  in  portions  of  the  city  natural 
gas  from  this  source  until  1917.  The  properties  of  the  Ogden  and 
Universal  Companies  were  leased  on  January  1,  1907;  six  years 
later  they  were  absorbed  by  commutation  of  future  rentals  and 
guarantee  of  their  bonds. 

Taking  Inventory 

This  final  feat  of  ingurgitation  finished  and  good  digestion 
assured,  the  history  now  goes  back  to  1897,  the  year  of  consoli- 
dation from  which  the  Peoples  Company  was  henceforth  to  date 
its  rounded  existence  as  a  public  utility.  Reporting  progress  at 
the  end  of  that  year,  it  had  sold  more  than  five  and  a  quarter 
billion  cubic  feet  of  gas,  had  nearly  1,320  miles  of  street  mains, 
162,000  meters  in  use,  and  29,000  street  lamps.  The  saving  was 
apparent  from  bringing  under  one  management  the  various  cor- 
porate entities  that  had  been  maintaining  a  separate  existence 
to  comply  with  judicial  decisions  rendered  in  the  ten  years  since 
the  unsuccessful  attempt  to  form  the  Chicago  Gas  Trust,  though 
anticipated  in  part  in  the  meantime;  in  comparison  with  the 
proportionate  expense  of  the  several  organizations,  in  1886,  for 
instance,  the  saving  was  strongly  marked. 

Survey  of  the  ground,  so  often  disturbed  and  still  to  be  dis- 
turbed by  rival  concerns,  showed  much  duplication  of  dis- 
tributing facilities,  but  those  could  be  viewed  as  anticipations  of 
the  rapidly  growing  wants  of  Chicago,  itself  growing  not  only  in 
population  but  to  an  even  greater  degree  in  the  use  of  gas,  as 
had  been  the  case  from  the  beginning.  The  use  of  incandescent 
gas  mantles  (Welsbach's  invention),  whereby  greater  light  was 


-;  VFARS  OF  GAS  SERVICE  IV  CHICAGO  4I 

10  be  had  at  a  smaller  cost,  was  still  in  course  of  development. 
The  two  companies  taken  in  during  the  year  were  making  money 
and  a  help  rather  than  a  hindrance.  Cias  was  selling  at  f>l  a 
thousand  cubic  feet  net  and  its  cheapness  encouraged  its  use. 

Constructive  Readjustments 

The  officers  of  the  consolidated  Peoples  Company,  as  elected 
on  August  2,  1897,  and  re-elected  for  years  to  come  were: 
President  C.  K.  G.  Billings;  \'ice-Presidcnts  A.  X.  Brady,  Wal- 
ton Ferguson  and  C.  K.  Wooster;  directors,  C.  K.  CJ.  Billings 
md  F.  S.Winston  of  Chicago  and  A.  N.  Brady,  Walton  Fergu- 
on,  and  R.  P.  Flower  of  New  York,  the  latter  being  the  former 
::overnor  of  New  York.  On  Mr.  Billings'  removal  to  New  ^'ork 
Cleorge  O.  Knapp  became  president  of  the  Company  in  1901. 
He  was  succeeded  by  James  F.  Meagher  in  1913,  he  by  E.  G. 
Cowdcry  in  1915,  and  he  by  Samuel  Insull  in  1919.  It  was  to  be 
many  years  after  consolidation  before  the  company  returned 
to  strict  home  rule  in  respect  to  chief  officers  and  directorate. 

The  years  following  consolidation,  for  a  couple  of  decades  or 
more,  were  to  be  years  of  readjustment  and  constructiveness. 
There  were  to  be  marked  changes  in  business  methods  and  in 
relations  with  customers,  as  well  as  in  relations  with  the  public 
through  governmental  agencies;  the  business  was  to  be  largely 
freed  eventually  from  the  guerrilla  warfare  of  local  politics,  but 
not  without  much  harassment  and  travail  for  yet  many  years. 

Prior  to  the  consolidation  of  1897,  it  was  becoming  a  practice 
to  fix  the  price  of  gas  for  five  year  periods  by  agreement  with 
the  city  authorities,  the  city  having  no  power  to  fix  rates. 

Rate  Questions  Arise 

In  effecting  consolidation  in  1<S97  it  was  agreed  that  the  price  of 
gas  should  be  not  more  than  the  lowest  rate  of  any  constituent 
company  at  that  time  which  made  the  rate  one  dollar  net.  By 
1906  the  net  rate  had  come  down  to  85  cents  for  the  1906-1911 
period.  In  preparation  for  the  next  five-year  period,  the  city 
council  employed  accountants  and  engineers  to  inquire  into  the 
costs  of  manufacturing  and  distributing  gas,  including  a  valua- 
tion of  the  company's  property,  an  inquirj'  in  which  the  com- 
pany fully  co-operated. 


42  THE   PEOPLES   GAS    LIGHT   &   COKE   COMPANY 

The  report  of  the  experts  fixed  11  cents  as  the  minimum  that 
could  be  fairly  charged  at  any  time  in  the  five-year  period.  This 
report  was  disregarded  and  another,  not  made  by  anyone  taking 
part  in  the  inquiry,  was  adopted,  setting  the  price  of  gas  at 
75  cents  for  the  first  year,  70  cents  for  the  second  and  third 
years,  and  68  cents  for  the  last  two  years  of  the  five.  In  this  the 
city  council  was  acting  under  a  state  statute  passed  in  1905 
which  purported  to  give  the  city  power  to  fix  the  price  of  gas, 
but  the  validity  of  which  was  not  recognized.  The  company  had 
to  go  to  court  to  protect  itself  against  this  confiscatory  rate 
schedule,  and  the  tedious  and  complicated  consequences  came 
to  be  known  as  "the  ten  million  dollar  refund  case." 

By  injunction  and  court  order  which  the  company  obeyed, 
the  price  of  gas  was  fixed  at  80  cents  net.  After  the  liti- 
gation had  been  dragging  some  years,  a  customer  went  to 
court  for  a  refund,  the  outcome  of  which  was  a  Supreme  Court 
decision  that  the  legislative  enactment  of  1905,  purporting  to 
empower  the  city  to  fix  rates,  was  invalid  and  that  the  city 
council's  75-68  cent  rate  schedule  was  therefore  null  and  void. 
Meanwhile  changing  business  conditions,  a  world  war,  state 
legislation,  collateral  litigation  and  politics  further  complicated 
the  "ten  million  dollar  case". 

State  Regulation  Arrives 

Following  the  example  of  New  York,  Wisconsin  (a  LaFollette 
influence  there)  and  other  states  in  "progressive"  legislation,  the 
Illinois  Legislature  in  1913  passed  a  law  creating  a  state  Public 
Utilities  Commission,  since  1921  called  the  Illinois  Commerce 
Commission.  This  body  was  given  regulatory  authority  over  all 
public  utilities  of  the  State,  including  of  course  gas  companies. 
Plenary  power  to  investigate,  to  fix  just  and  reasonable  rates, 
and  to  settle  disputes  arising  between  the  utility  and  its  patrons, 
was  reposed  in  the  Commission,  subject  only  to  review  by  the 
courts.  The  act  was  a  serious  attempt  to  settle  economic  ques- 
tions through  scientific  inquiry  rather  than  through  politics.  Not 
least  in  its  provisions  was  that  requiring  public  utilities  at  all 
times  to  promote  the  safety,  health,  comfort,  and  convenience 
of  patrons,  employees  and  public. 


~s    YFAR^i    OK   (JAS    SKRVICP    IN    (MHl'-ACr)  4 -^ 

City  authorities  resisted  and  in  some  measure  denied  the 
authority  of  the  Commission  as  superior  to  that  wliich  the  city 
government  had  assumed  to  exercise  over  public  utilities.  Pend- 
ing ultimate  and  uncontested  fixation  of  the  Commission's 
authority,  the  Peoples  Company  sought  to  avoid  friction  in  this 
relation  by  trying  to  reach  agreements  with  the  city  authorities, 
on  all  questions  that  were  in  any  degree  disputed,  before  going 
to  the  Commission  for  final  action.  The  matter  of  changing  gas 
standards  illustrates  how  its  experiences  were  not  always  happy 
ones. 

Some  Difficulties  Linger 

Though  required  by  ordinance  to  supply  gas  of  only  twenty-two 
candle  power,  the  company  had  long  been  giving  its  customers 
an  illuminant  of  twenty-four  candle  power,  as  demon- 
strated and  noted  with  approval  in  the  report  to  the  city  council 
in  the  spring  of  1911.  To  deliver  gas  of  so  high  an  illuminating 
value  in  the  mains  much  "gas  oil"  had  to  be  used  for  "carburet- 
ing" or  enriching  it.  Meanwhile  the  importance  of  this  illuminat- 
ing value  in  gas  had  been  declining  and  had  become  almost 
negligible,  and  calorific  or  heating  value  had  become  the  first  con- 
sideration in  fixing  a  standard  of  quality. 

Electric  lighting  had  displaced  much  of  the  use  of  gas  for 
lighting.  The  use  of  gas  for  cooking  and  other  heating  purposes 
in  commerce  and  industry,  where  its  illuminating  value  was  of 
no  account,  had  immensely  increased.  Even  where  gas  was  still 
used  for  lighting,  its  illuminating  or  candle  power  value  had 
become  negligible  because  the  most  efficient  and  economical  gas 
lighting  was  by  means  of  the  incandescent  mantle  light  and  this 
called  only  for  the  presence  of  heating  value  in  the  gas.  A  gas  of 
little  or  no  candle  power  derived  from  enrichment  by  "gas  oil" 
made  as  good  a  light  in  an  incandescent  mantle  as  a  high  candle 
power  gas. 

Gas  oil  is  a  petroleum  product.  Formerly  both  rich  and  cheap, 
the  demands  of  the  war  for  gasoline,  coupled  with  the  fabulously 
growing  use  of  motor  cars  in  the  United  States,  led  to  extracting 
from  it  much  of  its  former  richness  and  at  the  same  time  increased 
its  price.  It  therefore  took  more  oil  at  a  higher  cost  to  produce 
gas.  True  in  1915,  it  became  truer  in  1916.  In  1915  4^3  cents  a 
gallon  for  gas  oil  was  thought  extremely  high;  in  1916  a  poorer 


44  THE   PEOPLES   GAS    LIGHT   &   COKE   COMPANY 

oil  brought  5}/i  cents.  This  increase  of  one  cent  meant  an  in- 
creased cost  of  nearly  five  cents  a  thousand  cubic  feet  in  making 
gas.  In  1915  gas  oil  cost  the  company  32,080,284.43;  in  1916  the 
figure  rose  to  33,295,751.35,  an  increase  of  31,215,466.92.  At  the 
same  time  coal  and  all  other  elements  of  manufacture  were 
growing  increasingly  costly  and  were  to  continue  so. 

New  Troubles  Multiply 

The  company  sought  in  1915  to  take  steps  to  mitigate  the  situa- 
tion by  approaching  the  city  authorities  for  an  agreement  on 
the  factors  involved  before  going  to  the  State  Commission.  It 
was  more  than  two  years  and  a  half  later,  on  June  25,  1917,  that 
the  city  assented  to  withdraw  opposition  to  elimination  of  the 
candle  power  standard,  to  a  modernized  sliding  scale  of  rates, 
and  to  greater  use  of  coal  gas  in  coping  with  new  conditions. 
Nor  was  this  all.  On  account  of  war  time  wage  and  labor  con- 
ditions, coupled  with  financial  pinches  of  which  the  gas  oil  detail 
was  an  example,  efficiency  in  certain  departments  of  the  company 
became  sadly  impaired  in  1918.  Errors  in  monthly  bills  led  to 
appeals  to  the  Utilities  Commission  and  to  much  clamorous 
criticism  of  the  company.  As  illustrating  only  one  phase  of  the 
financial  effects,  deferred  payments  of  monthly  bills  rose  from 
31,346,769.20  at  the  close  of  1917  to  32,218,233.69  in  1918,  a 
temporary  loss  to  the  company  of  3871,463.49  of  which  3330,- 
465.45  became  a  permanent  loss  in  accounts  written  oflt.  This 
heavy  penalty  was  paid  by  the  company  for  a  condition  that 
never  was  as  bad  as  painted.  The  erroneous  bills  that  caused  all 
the  clamor  totalled  only  120,000  out  of  8,000,000  sent  out  that 
year,  or  about  three  in  200. 

Relief  Disastrously  Delayed 

The  company  and  its  stockholders  sufi'ered  grievously  from 
the  accumulation  of  the  specified  and  collateral  troubles,  be- 
ginning with  the  city  government's  delay  in  responding  to  the 
appeal  on  the  candle  power  and  gas  oil  situation  in  1915,  and 
running  on  through  war  time  conditions.  Relief  from  the  candle 
power  standard,  rate  readjustments  and  other  expedients  came 
too  late.  By  the  time  a  proposed  remedy  could  be  worked 
through  the  red  tape  and  delays  of  governmental  bodies,  the 
rapid  changes  of  war  time  would  make  it  ineffective. 


75    VEARS    OF   CAS    SERVICK    IV    CHICACO  4  If 

Thenetearningsof  ihcCompany  which  had  been 33,292,467.98 
in  1914,  fell  to  33,228,965.59  in  1915.  This  "net"  fell  again  to 
32,077,258.16  in  1916.  In  1917  after  bond  interest  was  paid  there 
was  a  deficit  of  3365,201.35  and  a  greater  one  of  31,366,928.54  in 
1918.  In  1919  there  was  a  small  surplus  over  ojH'raling  costs  ami 
bond  interest  of  3^)5,207.4^)  and  a  surplus  of  3380,752.02  in  1920, 
but  the  "net"  became  normal  oiih-  in  V)2\. 

On  account  of  these  heavy  losses,  the  dividend  rate,  which 
had  been  eight  per  cent,  was  reduced  to  six  per  cent  in  May,  1916, 
and  to  four  per  cent  in  May,  1917.  After  August,  1917,  dividends 
ceased  until  January,  1922.  The  credit  of  the  company  was 
heavily  impaired  and  it  may  be  said  to  have  weathered  the 
storm  only  through  the  good  will  and  confidence  of  its  bankers — • 
or,  more  exactl}',  the  confidence  of  the  bankers  in  the  new  man- 
agement that  took  hold  of  the  company  at  the  beginning  of  1919. 


CHAPTER  VI 

Resurrection 

Samuel  InsuU  had  taken  a  place  on  the  company's  directorate  in 
1913,  and  become  chairman  of  the  board.  During  the  war  prac- 
tically all  of  his  time  and  attention  had  been  absorbed  by  his 
service  as  head  of  the  State  Council  of  Defense  of  Illinois.  When 
released  from  war  work,  he  was  moved  by  the  situation  of  the 
company  to  assume  personal  responsibility  for  its  management 
in  all  detail  and  in  February,  1919,  he  was  elected  its  President. 
Effects  were  noticeable  almost  immediately  but  considerable 
time  had  to  pass  before  the  effects  became  financially  productive. 

The  company  had  to  have  rate  re-adjustments  or  go  headlong 
to  financial  ruin.  It  was  selling  its  product  at  rates  fixed  before 
the  war  on  a  basis  of  pre-war  prices  and  operating  costs,  and  it 
was  paying  war  time  prices  for  labor,  material,  and  everything 
else  it  bought.  It  was  therefore  operating  at  a  positive  loss,  a  loss 
that  was  at  the  rate  of  310,000  a  day  for  a  considerable  period. 
But  the  clamor  and  public  hostility  stirred  up  by  the  trouble  of 
1918  made  adequate  rate  readjustments  hard  to  get.  Members 
of  the  state  Utilities  Commission  being  only  human,  were  hesi- 
tant to  do  even  partial  justice  in  the  face  of  general — or  what 
seemed  to  be  general — public  hostility.  To  alleviate  this  situa- 


-C    YEARS    OF   GAS    SF.RVKi:    IN    CHICAGO  47 

tion,  creation  of  a  friendlier  "alinospliere"  became  an  important 
part  of  the  new  manaKemeni's  job.  It  is  worth  mentioning  that 
in  the  doing  of  its  job,  the  "new  management"  comprised  only 
Mr.  Insull  and  a  couple  of  personal  assistants;  otherwise  the 
executive,  sub-executive  and  working  organization  of  the  com- 
pany was  unciianged. 

Rate  Adjustment  Comes 

In  the  face  of  the  company's  distress — operating  at  a  loss 
under  already  inadequate  rates — the  state  Commission  on  June 
19,  1919,  ordered  a  reduction  in  rates  amounting  to  approxi- 
mately four  per  cent.  Losses  continued  to  mount,  but  bettered 
service  to  customers  and  the  creation  of  an  all  around  friendlier 
atmosphere  was  coming  to  be  fell;  so  a  substantial  rate  readjust- 
ment upward  was  asked  for  on  April  20,  1920,  and  after  an  ex- 
haustive hearing  was  granted  on  June  20.  Meanwhile  the  Com- 
mission was  conducting  a  thorough  inquiry  into  the  value  of  the 
company's  property  which  had  been  started  on  September  24, 
1919.  Throughout  all  previous  negotiations  or  litigation  touch- 
ing rates,  the  value  of  the  company's  property  and  the  amount 
of  return  it  was  entitled  to  earn  on  that  valuation  had  never 
been  established,  although  the  company  had  tried  hard  to  have 
this  done. 

The  Commission'svaluation  inquiry  was  completed  on  Decem- 
ber 21,  1920.  It  set  the  valuation  of  the  company's  property 
"used  and  useful"  in  the  manufacture  and  distribution  of  gas  as 
of  January  1,  1920,  at  385,(XX),000.  This  included  allowance  for 
going  value  and  working  capital  but  excluded  the  Peoples  Gas 
Building  and  other  property  not  essential  to  the  business  of 
making  and  selling  gas.  The  Commission  also  found  that  the 
company  was  entitled  to  annual  net  earnings  equivalent  to  seven 
and  one-half  per  cent  on  this  valuation,  or  }56,375,(XX)  annually, 
subject  to  increase  in  proportion  to  subsequent  increases  in 
the  capital  investment. 

Getting  A  New  Plant 

Important  operating  efficiencies  and  economies  were  also 
effected  in  1919  and  subsequent  years,  but  the  best  that  could 
be  done  with  existing  plants  was  not  enough.  As  far  back  as 
1911,  engineers  were  convinced  of  the   desirability  of  re-intro- 


48 


THE    PEOPLES   GAS    LIGHT  &   COKE    COMPANY 


ducing  a  certain  amount  of  coal  gas  making,  combined  with 
water  gas  making,  provided  the  out-of-date  candle  power 
standard  of  gas  quality  could  be  eliminated. 

A  site  for  a  coal  gas  plant  was  acquired — 373  acres — at  Craw- 
ford Avenue  and  35th  Street,  on  the  drainage  Canal  and  con- 
struction was  begun  but  was  soon  halted  by  delay  in  getting 
action  on  the  candle  power  question,  as  already  noted.  When 
that  obstacle  had  been  eliminated  the  company  was  financially 
unable  to  proceed.  The  Koppers  Company  of  Pittsburgh  was 
eventually  interested  to  finance  and  build  for  the  Company  a 
combination  coal  and  water  gas  plant  on  the  Crawford  Avenue 
site.  This  was  done  through  a  subsidiary  of  the  Koppers  Com- 
pany, the  Chicago  By-Product  Coke  Company. 

The  new  plant  was  put  into  operation  on  October  10,  1921,  and 
has  since  been  added  to.  It  is  one  of  the  largest  gas  plants  in  the 
world  and  is  said  to  be  the  last  word  in  efficiency  and  economy. 


Michigan  Ave.  at  Adams  St.  in  1871. — Site  of  present  Gas  Company's  Building 


7C    VKARs    OF    CAS    SF.  R\ICF.    IN    CHICAGO  4O 

A  large  part  of  the  coke  produced  in  making  coal  gas  there  is 
used  in  other  gas  making  operations  at  the  same  plant  ami  in  the 
seven  water  gas  plants  of  the  IVoplcs  Company,  and  a  surplus 
is  marketed  for  domestic  and  blast  furnace  use.  The  plant 
represents  an  investment  of  about  }^2S,(XX),(XK),  exclusive  of  the 
land.  Kventually  it  is  to  be  the  property  of  the  Peoples  Com- 
panv,  which  has  the  right  to  take  it  over  any  time  after  Feb- 
ruary 1,  1926. 

This  plant  with  its  connections,  strategically  located  for  mass 
production  and  economical  distribution  of  gas,  is  the  key  to  gas 
service  planning  for  the  future.  It  is  designed  for  expansion,  as 
necessary,  to  five  times  its  present  capacity.  A  4K-inch  main 
running  southward  from  it  to  Seventy-first  Street  and  north- 
ward almost  to  the  city  limits  is  the  backbone  of  a  distribution 
system,  with  adequate  holder  (storage)  capacity  to  assure  an 
ample  gas  supply  for  the  industries  as  well  as  the  homes  of 
Chicago  now  and  in  years  to  come.  The  need  of  reckoning  with 
the  future  is  emphasized  by  the  fact  that  while  the  population 
of  Chicago  has  been  increased  twenty-three  per  cent  in  the 
last  ten  years  the  consumption  of  gas  has  increased  fift\-fivc 
per  cent. 

Dividends  Resumed 

As  a  consequence  of  this  regenerative  work  in  both  the 
tangibles  and  the  intangibles  of  the  business,  the  company  was 
able  to  resume,  in  January,  1922,  the  payment  of  quarterly 
dividends  to  stockholders  for  the  first  time  since  August,  1917. 
The  significance  of  this  is  reflected  in  an  observation  by  John  J. 
Mitchell,  the  veteran  banker  and  a  Director  of  the  company,  on 
the  day  the  Board  of  Directors  voted  the  first  of  resumed  divi- 
dends. "This,"  he  said,  "is  the  most  striking  example  of  corporate 
resurrection  that  I  have  ever  seen  in  all  of  my  banking  exper- 
ience." Dividends  have  continued  at  the  rate  of  five  per  cent 
per  annum  in  1922,  six  per  cent  in  1923,  seven  per  cent  in  1924 
and  eight  per  cent  in  1925.  Meanwhile  satisfactory  rc-adjust- 
mcnts  of  salaries  and  wages  to  employees  have  been  made  and 
the  price  of  gas  to  all  customers  has  been  reduced  twice  since 
the  re-adjustment  of  June,  1920. 

It  is  worthy  of  note  that  the  company  has  finally  achieved 
a  close  approach  to  really  scientific  rate  making,  designed  to 


50 


THE   PEOPLES   GAS    LIGHT   &  COKE   COMPANY 


promote  greater  use  of  gas,  in  quantity,  for  industrial  and  house 
heating  purposes.  The  rate  schedule  now  in  effect  closely  follows 
the  rate  making  principles  that  have  been  such  a  potent  factor 
in  the  sensational  growth  of  the  electrical  business,  enabling  the 
acquisition  of  a  great  volume  of  business  from  very  large  users, 
to  the  collateral  advantage  of  all  users,  including  the  smallest 
ones. 

Gas  and  Laboratory  Problems 

The  wholesale  use  of  gas  in  manufacturing  points  the  future 
development  of  the  industry.  At  the  present  moment  one-fiftieth 
of  the  customers  are  using  nearly  one-third  of  the  total  output 
and  several  of  these  each  use  weekly  twice  as  much  gas  as  all 
Chicago  used  in  a  twelvemonth  seventy-five  years  ago,  and  as 
much  as  suffices  the  entire  needs  of  such  a  city  as  Ottawa,  111. 
The  company's  laboratory,  which  began  its  work  with  the  be- 
ginning of  the  company,  has  taken  on  new  significance  in  the 
light  of  these  developments.  There  the  problems  of  the  various 
arts  are  worked  out,  and  manufacturers  are  shown  by  demon- 
stration the  advantages  of  gas  as  a  fuel  for  every  desired  purpose. 
As  the  fuel  use  of  gas  both  industrially  and  domestically  has 
come  to  overshadow  use  of  it  for  lighting,  the  importance  of  gas- 
burning  appliance  efficiency  has  grown.  Hence  the  increasingly 
intensive  attention  given  to  making  it  easy  for  customers  to  buy 


(^{•' 


R'TTTJrir 

:    •  '■ 

w 

li'l! 

--.y:rr- 

Ku 

nfw  1 

Michigan  Avenue- 


7<    VFARS    OF   CAS    SERVICE    IN    CHICA(;()  CI 

appliances  of  assured  efficiency.  The  first  store  for  selling  appli- 
ances that  the  company  could  stand  back  of  was  opened  more 
than  twenty  years  ago.  There  are  now  fourteen,  besides  the 
store  at  Michigan  Avenue  and  Adams  Street,  all  located  for 
their  convenience  to  centers  of  population,  each  one  also  housing 
a  branch  office  of  the  company  where  monthly  bills  can  be  paid 
and  all  kinds  of  business  transacted  directly  with  the  company. 
In  the  interest  of  efficiency,  the  selling  of  appliances  and  re- 
lated merchandise  has  all  been  handled  since  1920  by  a  sub- 
sidiary, the  Peoples  Gas  Stores,  Inc. 

Executive  Organization  Realigned 

In  March,  1922,  a  Home  Service  Department  was  inaugurated 
to  promote  more  home  cooking  by  providing  free  expert  advice 
in  the  preparation  and  serving  of  meals.  It  was  opened  in  two 
small  rooms  in  the  basement  of  the  Peoples  Gas  Building. 
Within  a  month  eager  housewives  were  sitting  on  the  stairs.  At 
the  present  time  the  entire  basement  is  given  up  to  the  depart- 
ment's demonstrations,  five  branches  of  the  department  are 
operating  in  connection  with  outlying  stores,  there  is  a  kitchen 
on  wheels  which  travels  through  the  residence  sections  of  the 
town  for  the  same  purpose,  and  a  monthly  bulletin  of  suitable 
recipes  and  a  radio  service  are  in  use. 


!__-, 


Chicago.  1925 

UBRARY 
UNfVERs/nr  OF  lUiNOlj 
W  I'RBANA  CHAMP-ION 


52  THE    PEOPLES   GAS    LIGHT   &  COKE   COMPANY 

In  1924  the  company's  executive  organization  was  re-aligned. 
Samuel  Insull  is  President  and  associated  with  him  as  Directors 
are  Messrs.  John  J.  Mitchell,  James  A.  Patten,  Stanley  Field, 
and  Martin  J.  Insull,  all  of  Chicago.  There  are  also  five  Vice- 
Presidents*  John  H.  Eustace  in  charge  of  operations,  who  super- 
vises all  activities  having  to  do  with  gas  production  and  distri- 
bution; George  F.  Mitchell  in  charge  of  finance,  who  supervises 
the  offices  of  the  secretary  and  the  treasurer  and  the  purchasing, 
stores,  claim,  and  traffic  departments;  Bernard  J.  Mullaney,  in 
charge  of  public  and  industrial  relations,  who  supervises  the 
relations  of  the  company  with  the  public  and  with  its  employees, 
including  service  to  customers,  advertising,  employment,  medi- 
cal service,  welfare,  training  and  education,  safety,  restaurant, 
and  employees'  representation;  Theodore  V.  Purcell  in  charge  of 
sales,  who  supervises  the  new  business,  the  industrial  and 
home  service  departments,  and  the  operation  of  Peoples  Gas 
Stores,  Inc.;  William  A.  Sauer,  in  charge  of  accounts,  who 
supervises  the  offices  of  comptroller  and  auditor,  and  all  the 
accounting,  bookkeeping,  auditing,  and  allied  departments. 


^.^d---^  i^_     ^    '^ 


Lll  MM  IK    \  II 

Progression 

Kxtcrnal  relations,  with  government,  with  stockholders,  with 
the  public,  are  set  forth  in  much  detail  in  the  printed  annual 
reports  of  the  Peoples  Gas  Light  and  Coke  Compan\',  but  com- 
paratively little  can  be  said  in  these  about  the  hardly  less  im- 
portant relations  between  the  management  with  the  emplo)ees. 
Vet  in  these  more  private  matters  the  activities  are  so  numerous 
and  so  pervasive  that  it  is  no  exaggeration  to  say  that  nothing 
in  the  lives  of  those  in  its  service  is  of  unconcern  to  the  Com- 
pany as  effecting  personal  efficiency,  whether  it  is  in  the  nature 
of  such  preventives  as  training  and  education,  providing  amuse- 
ments and  recreation  for  the  wise  use  of  leisure,  and  securing 
an  easy  justice,  or  such  curatives  as  care  in  illness  and  old  age  for 
physical  ills  or  the  alleviation  of  worries  and  troubles  for  ills 
more  insidious. 

To  begin  with,  it  has  long  been  the  Company's  policy  to  make 
all  its  promotions  from  within  its  own  ranks,  beginners  in  its 
service  starting  at  or  near  the  bottom  with  an  open  chance  to 
work  up.  While  there  may  be  instances  in  which  an  infusion  of 
fresh  blood  from  without  might  have  been  advantageous  in 
managerial  positions,  this  is  more  than  made  up  by  the  security 
felt  throughout  the  organization,  not  only  that  the  present  job 
is  safely  in  hand  but  that  diligence  and  ajiplication  are  certain  of 
their  rewards,  a  certainty  that  mingles  ambition  with  content- 
ment and  insures  long  periods  of  service  with  little  labor  turn- 
over. It  will  be  seen  how  other  policies  make  to  the  same  end. 


54  THE   PEOPLES   GAS    LIGHT   &   COKE   COMPANY 

Industrial  Relations 

Perhaps  the  most  important  of  these,  since  even  the  smallest 
injustices  bulk  large  to  those  who  suffer  from  them,  may  be 
seen  in  the  Department  of  Industrial  Relations,  under  the  super- 
intendency  of  one  of  the  Vice-Presidents,  and  one  of  the  most 
striking  of  the  department's  activities  is  found  in  the  employees' 
representation  plan,  set  in  motion  by  order  of  Pres.  Insull  on  Jan. 
1,  1921,  and  assuring  the  rights  of  free  assembly  and  free  speech. 

There  are  now  about  320  representatives,  equally  divided 
between  management  and  employees,  who,  for  greater  ease  in 
handling  business,  are  organized  in  twenty-one  councils,  meeting 
in  fourteen  groups  with  allied  interests,  and  always  on  the 
Company's  time.  There  is  a  fixed  basis  of  representation;  there 
are  deputy  or  alternate  representatives  to  insure  an  adequate 
attendance  and  all  duly  nominated  in  primaries  and  elected  by 
secret  ballot.  These  councils  aiford  a  ready  and  serviceable 
means  for  discussing  conditions  of  employment,  clearing  up 
apprehensions,  remedying  injustices  small  and  great  as  they 
arise,  developing  an  American  assertiveness,  rendering  harmless 
what  are  called  on  shipboard  sea-lawyers,  and  educating  in 
self-government  and  morale. 

Now  in  its  fifth  year  of  operation,  Employees' Representation 
is  held  to  be  of  increasing  value  in  promoting  cooperation  be- 
tween departments,  bettering  relationships  with  the  gas-con- 
suming public,  increasing  an  understanding  of  the  aims  of  the 
Company,  preventing  disputes  and  ensuing  dislikes,  developing 
tolerance  and  open-mindedness,  and  in  general  clarifying  al- 
most every  conceivable  situation. 

Social  Relations 

There  is  a  Peoples  Gas  Club  open  to  all  employees,  which  began 
in  1911  as  a  club  for  boys  only.  This  led  in  the  succeeding  year 
to  a  series  of  lectures  by  thirty  of  the  superintendents  and  mana- 
gers covering  nearly  every  phase  of  the  Company's  activities, 
and  later  in  the  year  caused  the  club's  privileges  to  be  thrown 
open  to  everybody  in  the  service.  It  has  thus  grown  from  a 
membership  of  thirty  to  more  than  three  thousand. 

Its  objects,  well  lived  up  to  through  the  years  and  quite  past 
the  experimental  stage,  are  set  forth  as  "The  promotion  of 
Good  Fellowship  by  providing  employees  opportunities  to  get 


75  YEARS  OF  GAS  SERVICE  IN  CHICAGO  (^  ^ 

together  for  purposes  of  Education,  Entertainments,  and  parti- 
cipation in  Clean  Sports."  It  publishes  The  Peoples  Gas  Club 
News,  with  its  subject  matter  and  cartoons  furnished  by  the 
members,  and  this  has  a  growing  interest  and  popularity.  It  is 
to  be  noted  that  all  of  its  officers  have  earned  promotion.  Its 
activities,  past  or  present,  include  a  choral  society,  private 
theatricals  and  vaudeville,  picnics,  luncheons,  dinners,  dances, 
a  drill  corps,  six  competing  baseball  teams,  basketball,  field 
sports,  and  an  annual  Christmas  party  for  the  children  of  mem- 
bers which  is  an  enormous  success. 

During  the  summer  of  1923  the  Company  acquired  an  interest 
in  the  Lake  Lawn  Hotel  Company,  with  an  hotel,  cottages,  and 
camping  facilities  on  Lake  Delavan,  Wisconsin,  where  vacations 
are  spent  at  a  minimum  of  expense  to  employees  and  their 
families.  Education  and  Training 

The  education  of  foreign-born  employees  in  the  interests  of 
Americanization  began  in  1919,  and  it  has  already  served  and  is 
serving  men  and  women  of  thirty  nationalties.  The  Company 
itself  has  had  evening  classes,  sending  many  also  to  the  public 
night  schools.  In  September,  1921,  there  were  456  working  for 
the  Company  who  had  not  taken  the  first  steps  toward  naturali- 
zation. On  April  22,  1923,  there  were  none.  The  effort  is  contin- 
uous to  the  end  that  every  employee  shall  be  a  voting  citizen  or 
on  the  way  to  becoming  one  at  the  earliest  possible  date. 

The  Library  was  opened  in  the  Peoples  Gas  Building  in  1911 
and  now  contains  3500  volumes  and  many  periodicals,  popular 
and  technical.  It  is  used  both  for  information  and  recreation,  for 
reference  and  circulation,  and  is  in  constant  demand.  The 
librarian  is  in  charge  of  the  general  work  in  training  and  educa- 
tion. There  are  lecture  courses  on  the  gas  business  economics 
and  many  other  topics,  classes  in  public  speaking,  and  a  practi- 
cal course  in  letter  writing  for  everybody  concerned,  from  the 
150  dictators  of  correspondence  to  the  stenographers,  typists, 
calculating  machine,  mimeograph,  and  multigraph  operators, 
and  proof  readers.  There  are  also  study  classes  for  girls,  which 
teach  home  hygiene,  sewing,  dressmaking  and  millinery,  first 
aid,  and  practical  cooking,  all  of  them  popular. 

In  1921  began  the  system,  elaborated  three  years  later,  of 
rewarding  employees  for  every  suggestion  made  that  will  help 


56  THE   PEOPLES   GAS    LIGHT   &   COKE   COMPANY 

the  Company  and  themselves  to  attain  its  ideals  of  manufacture, 
sales,  and  service,  including  the  elimination  so  far  as  possible  of 
error.  All  suggestions  are  now  sent  in  and  referred  anonymously 
to  a  practical  committee.  The  smallest  cash  award  is  $5,  the 
largest  yet  given  $250.  When  not  adjudged  of  worth  enough  to 
earn  a  cash  prize,  merit  marks  are  given,  which  earn  monetary 
reward  when  enough  are  accumulated. 

Annuities,  Insurance,  Thrift 

The  Company  has  had  service  annuities  in  effect  for  many  years, 
by  which  pensions  running  from  325  to  350  a  month  were  granted 
fordisabilitythrough  superannuation  or  otherwise,  according  to 
circumstances.  In  June,  1912,  the  system  since  in  effect  was 
adopted.  The  amount  of  the  annuity  is  arrived  at  by  averaging 
the  salary  or  wage  received  during  the  last  five  years  of  work  and 
multiplying  two  per  cent  of  this  by  the  number  of  years  employ- 
ed, the  minimum  being  325  and  the  maximum  3500  a  month. 

In  lieu  of  a  Christmas  turkey,  there  was  adopted  on  December 
24,  1921,  a  comprehensive  plan  of  gift  insurance  as  a  present 
from  the  Company  and  annually  renewed.  Under  it  those  who 
have  been  in  the  service  more  than  six  months  but  less  than  a 
year  are  given  a  minimum  policy  for  3500,  and  so  on  up  year  by 
year  until  the  maximum  of  31500  is  reached  on  and  after  six 
years.  In  addition  all  eligible  employees  are  permitted  to  take 
out  an  equal  amount  of  insurance  at  cost,  simply  by  asking  for 
it,  with  a  conversion  privilege  if  they  leave  the  service  of  the 
Company.  At  the  close  of  1924  there  were  3839  employees  in 
every  grade  thus  provided  for  to  the  total  amount  of  34,204,500. 
There  is  also  a  liberal  death  benefit  practice,  voluntarily  applied 
by  the  Company  when  circumstances  warrant  it. 

Systematic  saving  and  investment  is  definitely  cultivated,  for 
which  there  is  a  Savings  and  Investment  Fund  supervised  by 
responsible  company  executives.  In  the  current  fund,  employees 
of  the  company  have  accumulations  amounting  to  approxi- 
mately 31,500,000. 

A  considerable  number  of  employees  have  become  stock- 
holders in  the  company  during  the  few  years  since  inauguration 
of  the  policy  of  interesting  the  public  in  general  and  the  em- 
ployees of  the  company  in  particular  in  becoming  owners  of  its 
stock.  The  total  number  of  stockholders  in  the  company  has 


75    YEARS   OF   CAS    SF.RVICK    IN    CHICAGO  57 


nearly  doubled  in  live  years.  On  January  1,  1925,  the  company 
was  owned  by  9,452  stockholders  of  whom  5880  lived  in  Chicago 
and  6817  in  Illinois,  removing  the  last  vestige  of  absentee  owner- 
ship. 

Illness  and  Kmert^encies 

Sick  benefits  arc  paid  to  all,  whether  in  receipt  of  salaries  or 
wages,  and  all  so  afflicted  are  regularly  visited  and  their  cases 
kept  under  constant  and  watchful  care.  Loans  without  interest 
are  also  made  when  the  need  is  urgent,  and  these  are  held  as 
strictly  confidential. 

Perhaps  the  most  interesting  service  thus  rendered  is  in 
personal  advice  and  assistance,  which  has  been  stretched  to 
cover  nearly  every  imaginable  situation.  There  were  955  of 
these  cases  in  1924,  the  nature  of  which  may  be  roughly  classi- 
fied thus:  477  were  concerned  with  illness  and  death,  374  with 
business  and  monetary  affairs  in  and  out  of  the  Company,  89 
with  legal  matters, 35  with  domestic  difficulties, and  many  others. 
There  is  also  considerable  co-operative  buying  of  food,  clothing 
and  household  necessities  which  help  to  ease  the  cost  of  living. 

It  would  seem  as  if  nothing  could  possibly  arise  and,  so  arisen, 
be  capable  of  betterment  by  understanding,  sympathy,  advice, 
and  the  intelligent  use  of  large  financial  resources  and  far- 
reaching  influence,  that  cannot  be  met  and  cared  for  on  the 
instant,  whether  for  those  directly  in  the  Company's  service  or 
for  the  members  of  their  families. 

For  women,  there  is  further  provision  made  through  the  dean 
of  women,  appointed  in  1919,  who  has  direct  charge  of  the  six 
hundred  or  more  feminine  employees.  She  supervises  their  em- 
ployment, also  their  discharge  when  due  cause  arises,  and  acts 
as  an  adviser  in  every  case  where  advice  is  needed  by  a  woman 
from  a  woman  both  kindly  and  understanding. 

General  \N'elfare 

Both  annuities  and  insurance  are  grouped  under  the  general 
head  of  Employees'  Service  in  the  Industrial  Relations  De- 
partment and  there  is  also  provision  made  remediall)-  for  any- 
thing which  may  unfavorably  affect  the  condition  of  the  em- 
ployee. To  the  manager  and  his  aids  he  may  go  for  monetary, 
medical,  or  legal  help  of  every  sort  or  for  amelioration  of  any  of 
the  diverse  adversities  which  beset  the  life  of  man.  The  Com- 


THE    PEOPLES   GAS    LIGHT   &   COKE   COMPANY 


pany  makes  a  direct  appropriation  for  the  usual  cases  of  this 
nature,  but  there  is  in  addition  a  substantial  sum  of  money- 
available  from  a  source  less  direct,  the  origin  of  which  possesses 
interest. 

In  July,  1913,  George  O.  Knapp  resigned  as  President  and 
Director  of  the  Company  after  thirteen  years  of  service  as  such, 
with  a  much  longer  connection  in  positions  less  exalted,  and  was 
duly  awarded  the  maximum  annuity  of  ^6000  annually.  After 
a  twelvemonth  of  monthly  checks  in  payment  of  this,  he  re- 
turned the  entire  amount,  asking  that  his  name  be  retained 
throughout  his  life  on  the  annuitants'  list,  but  that  the  present 
sum  and  all  future  amounts  be  placed  in  the  trust  then  created 
and  to  be  known  as  the  George  O.  Knapp  Benevolent  Fund,  for 
the  relief  of  situations  not  otherwise  provided  for  in  which  money 
wisely  spent  can  be  of  service;  a  beneficence  as  wise  as  it  is 
original,  since  it  leaves  the  department  with  means  to  cope  with 

any  situation. 

Universal  Benefit 

Human  aifairs  are  likely  to  proceed  best,  historians  would  have 
us  believe,  when  governed  by  enlightened  selfishness  arrived  at 
through  mutual  compromise.  In  the  chapter  foregoing  this 
appears  to  be  made  unusually  plain.  So  large  a  share  of  self- 
government  is  secured  to  the  employees  through  their  councils 
that  complaints  of  undue  paternalism  are  deprived  of  cogency. 
It  would  be  difficult  to  state  whether  the  individual  is  more 
interested  in  the  terms  of  his  employment,  in  his  health,  his  rec- 
reations, his  security,  or  the  security  of  his  family;  all  are  un- 
questioned factors  in  that  total  which  constitutes  happiness. 

The  Company  is  interested  no  less,  but  it  leaves  participation 
in  the  various  advantages  and  activities  not  strictly  provided  for 
in  the  contract  of  hiring  entirely  in  the  hands  of  the  person  hired. 
No  one  is  compelled  to  belong  to  the  Peoples  Gas  Club,  to  accept 
an  annuity  or  gift  insurance  policy,  a  sick  benefit  emergency, 
loan,  welfare  aid,  or  a  chance  for  education  and  training,  and 
the  rest.  Participation  in  these  is  entirely  voluntary  and  there  is 
no  discrimination  against  those  who  refuse  to  participate. 

If  any  or  all  of  these  tend  to  make  an  individual  better  and 
happier  the  Company  is  helped  in  working  out  its  policies.  If 
they  make  him  a  better  citizen,  the  betterment  is  shared  by 
Company.  Community,  and  Country. 

THE    FAITHORN    COMPANr 


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UNIVERSITY  OF  ILLINOIS-URBANA 

3387R369S  C006 

75  YEARS  OF  GAS  SERVICE  IN  CHICAGO  CHGO 


3  0112  025293496 


